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Comment by theoj | Hacker News Reader

Some big assumptions in this post:

1. Assumption #1: T-mobile "has no plans for the future."

You can't possibly know that. If anything, the negotiated spectrum transfer and payout on deal failure is a small indication that they do have some plans for the future.

2. Assumption #2: Any carrier without the iPhone is doomed to failure.

Metro PCS does not offer the iPhone. I don't think they are going away anytime soon.

3. Assumption #3: The government needs to plan for cellular market consolidation in order to benefit the consumers.

Actually, cellular market consolidation is not good for the consumers. Consumers benefit the most when there's more competition. Having more carriers leads to more competition and gives consumers lower prices and better service -- it's simple economics.

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My point here is that T-mobile, as it currently is, just isn't competition for AT&T and Verizon anyway.

1. The only thin I can find at all on Google related to T-mobile building is this post, suggesting they need a partner to start working on LTE in — get this — 2015: http://www.slashgear.com/t-mobile-lte-plans-suggest-spectrum...

2. It's certainly helpful; I don't believe this alone would doom a carrier, but without other benefits (Metro PCS, your example, has very cheap pre-paid plans and is really a different service than AT&T, Verizon, or T-mobile) this does hurt them. Just look at the millions of customers that switched to AT&T from 2007 to 2010 before Verizon got the iPhone.

3. I didn't say and, in fact, do not believe that "consolidation" will necessarily benefit customers. My only belief here is that that the government did here — keep a independent — is not useful because T-mobile is simply not competition. If T-mobile isn't actually competition in the future for AT&T or Verizon, how does it help for it to exist or be broken up among other companies?

(I do, however, believe it is possible (definitely not guaranteed, but possible!) that this move, in fact, could help consumers: AT&T currently has the generally accepted worst coverage, and so if they improved that by acquiring T-mobile, Verizon now would have both a slower network and a worse telephone network, and would need to improve to compete with AT&T's faster speeds and now-better coverage.)

1. See mdasen's comment in this thread about the LTE rollout. TMo may not be as far behind compared to others.

2. You're assuming that unlike Metro PCS, TMo has no "other benefits". Not sure if that's true. Personally, I prefer TMo because they offer decent service at a good price -- at least in my area. I also like that they're not evil -- they're not actively trying to squeeze every last penny out of customers like some of the others companies I dealt with. Certainly many other TMo customers must see some value in TMO and their offerings, otherwise they'd not be customers and TMo would not be as large as it is.

3. TMo is competition to the largest players -- in the markets where TMo operates. If I didn't have TMo available in my market I'd opt for something else -- probably Verizon. So at least as far as I am concerned, in this market TMo (small co) is competition to Verizon (large co). The fact that TMo does not compete in as many markets as some of the other guys does not mean they are less meaningful competition in the markets where they do operate.

Also, there are some contradictions in your post.. one paragraph states you don't want consolidation, but the one immediately after has you pondering how to consolidate TMo and ATT to improve ATT's service. Reading between the lines (I apologize if I'm misrepresenting your position) it seems you believe that ATT is the "worthy" competitor based on size. My opinion is that it doesn't have to be a game of giants at the expense of the small players. Small players can survive as well in niches. Metro PCS / TMo are examples.

I'm saying that I don't necessarily want consolidation, but I don't have anything against it: I can see potential scenarios where each option here could both help and hurt consumers.

We'll see about LTE. From my understanding — and the fact that they recently tried to sell the company — Deutsche Telekom isn't interested in transforming T-mobile USA into a competitive player. We'll see, maybe with an extra $4B from AT&T they'll re-evaluate and attempt to stay competitive, but otherwise I can't see a disinterested parent company want to invest heavily in LTE rollout.

And, once every other carrier and most phones are on LTE (I'd say maybe 2013 or 2014, although I don't have any backing for that timeline), then T-mobile USA will be uncompetitive (without LTE). I've used LTE, and I don't think T-mobile can compete with ~4Mbps real-world speeds when I've (already!) used LTE at up to ~25Mbps, even if the prices are cheaper.

And I completely agree that small players can survive (I'd even say that T-mobile USA has a distinct possibility to survive and thrive), but in their current situation, I feel that it would take more than just not being purchased for that to happen: more interest from their parent company, an agressive (and probably expensive) LTE rollout, and maybe even the iPhone would be necessary to keep them competitive in a few years.

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