I think folks forget how dire Sprint's straits were at the time, and this specific merger truly was the least of all evils.
The reason their goose was cooked is because they previously were planning to acquire T Mobile, but SoftBank got back-channel info that it would never be approved by the anti-trust regulators. At the time they had Marcelo Claure running Sprint, basically a corporate "fixer" guy for SoftBank. So he ran the company into the dirt in order to make the merge feasible to regulators (e.g. - Sprint purchased a 33% stake in Tidal, the music streaming service. Or how they entered a partnership with bankrupt RadioShack after it got scooped up by PE, and decided it was a good idea to take over all the physical RadioShack locations and turn them into Sprint stores).
"Oh, whatever shall we do, our company is failing, you MUST let us merge with one of our primary competitors or we'll go bankrupt. No company at all is worse for consumers than a merged company."
What is SoftBank to gain here from enriching TMobile?
Sprint was dying - with extraordinarily high debt, in 2007, well before Softbank bought them, and indeed they lost money every year from 2008 forward - https://www.statista.com/statistics/481739/sprint-corporatio...
The Merger with Nextel managed to kill what was great about Nextel, and what was good about Sprint, and they lost customers in droves (mostly former Nextel ones). In reality Sprint bought Nextel's OAM equipment and their customers, and moved all the legacy Sprint customers onto the surviving billing and network management platforms (Nextel). The iDEN turndown also lost even more customers, most of whom who realized they didnt need PTToC after all (which is too bad, because on dedicated CDMA hardware, it worked really great).
Then they needed to start rolling out LTE (Network Vision) - and NV didnt start in earnest until 2012/13 - and as someone who was on the field end of it, was very very very poorly managed. Sprint some years prior had outsourced all their engineering expertise to Ericsson, which means they had no one in house with any knowledge. They only realized that 18 months in, and then scrambled to get people back from Ericsson (who I will note, they did not contract any of the deployment management to).
I only know this because I was in the middle of the deployment as a field resource in Seattle.
My guess is only half the sites in the network (in Seattle Market) had enough customers to pay their fixed costs.
I concluded while I worked there that there was no way for four carriers to be viable, there isnt enough spectrum allocated, and you pay the same fixed costs over and over again.
I'll go further, Sprint had a massive switch facility for the LD operations with room for like 4 DMS250's in Tacoma, but that's not where they put the SPCS 5ESS, that was in Kirkland in a rented building (and interestingly enough, it's still part of T-Mobiles operations today), there was also another Motorola iDEN switch also in Kirkland.
Post merger they never really made any effort to reduce their fixed costs (sites, switching centers, et al), because that would have cost money - they also got bled dry by having to foot the entire bill for rebanding the SMR band, which was on the order of 2.5 billion dollars. They did close stores (and RS was a major outlet for Sprint Sales, before it went belly up) which contributed to problems later.
So I don't know where you got your info, but I think its hooey - before Softbank bought Sprint, they didn't have the capital to upgrade their 2G/3G network to LTE, much less consider a merger with T-Mobile.
The first phone was labeled 4G and second one was 4G LTE, which sprint didn't have in my area. I had been using wimax.
I switched to Verizon not too long after that so I could have 4G again
All of them - all the CW sites, were under provisioned for backhaul.
I think both of us can be right at the same time though. Just because they had problems before the SoftBank acquisition as well doesn't necessarily make what I'm saying unreasonable. There was still sentiment in 2013 when SB closed the deal that regulators would not have approved of Sprint acquiring T Mobile [0], despite the struggles going on at Sprint at the time (that you describe). Sprint was definitely putting together a bid to acquire T Mobile, WSJ reported on it [1].
As you yourself said, Sprint was _dying_ at the time of the SB acquisition, but as far as large firms go, they were far from bankrupt yet. SoftBank simply twisted the dagger and then presented the corpse to congress instead of the dying patient.
[0] https://www.theverge.com/2014/2/4/5376824/fcc-chief-reported...
[1] https://www.wsj.com/articles/SB10001424052702303293604579256...
I cannot explain how poorly managed Sprint was, it'd take me an essay to just explain the various dysfunctions I saw there.
That said, it did improve some once Softbank bought them.
I also saw at least half a dozen sites, cut and in service still sitting on their pallets, such a mess.
Imagine for a moment you go off to the crusades, leave the barn to one group, the fields to another group, and leave the house to a third group, then gleave no one in charge and give them no way to communicate beyond the most informal means - and you're surprised everything is on fire upon your return?
In the end it did work once it was done, but it was only hell for the customer during deployment because it was deployed and cut in a hopscotch fashion, which would be fine, if you could roam from new back to old - there was a one way roam, from old to new, once on new, there was no path to roam back.
The other bonus was that being a CDMA device, there was no connectivity when traveling internationally, and no option to buy a local SIM card. Wifi only.
It was all microwave back hauled so rain fade in stormy weather was absolutely a thing. Most of those were FCC licensed or should have been but I know of at least 1 market where they just never filed the paperwork to get the licenses and built it anyway.
In my part of the world I see 5G on 1800MHz and 2100MHz bands in addition to the 3.5GHz one.
Unfortunately that's not done near my home, so I get 1-2bars of 5G, instead of the full bars I see at the office and elsewhere in town.
Marcello has a lot of faults but he didn't run Sprint into the ground. He is actually pretty smart and at that time we cut over a billion dollars out of the operating budget circa 2016/2017 iirc. It was an impossible position and it's really sad because it was a great old company in my estimation. T-Mobile is just the worst.
I remember Nextel and iDEN sites co-sited on the adjacent towers.. but with different shelters (sprint was often outdoor cabinets).
I'd be a horrible businessman, because I really can't imagine keeping so much debt and simply being okay with it until its too late. I'd be considered a fool if I managed my personal finances like that, but that's the normal operation when managing millions or especially billions at a time.
It did work quite well in practice, I can assure you.
In that setup, all cell providers would effectively be an MVNO, and the three (then, four) physical networks would be operated at arms length from the consumer facing side. Also, the four networks could be structured so that their financial incentives were to improve cell coverage and bandwidth instead of undermining each others' operations.
How so? Sprint operated 4G LTE, which is a GSM technology (or alternatively, unified the two, depending on how you look at it).
This is why Sprint and Verizon used whitelists: they literally couldn't accept GSM-only devices because you wouldn't be able to make a phone call (the phone would try UMTS but only the non-supported CDMA2000 can be used to actually call, so in turn no phone calls).
Sprint went further by using the CDMA provisioning system on top of LTE instead of just using SIM cards and 3GPP provisioning like most GSM and CDMA carriers. This was a nightmare for custom ROM users like me as custom ROMs were designed for GSM carriers in mind and Sprint was at best an afterthought.
That's when the salesman told me to leave.
Which, tbh, is exactly what LTE is.
Regulators can work to make it extremely simple for new techs in this space to come up so there is real competition for ATT etc.
The FCC was created to manage the scarcity inherent to the radio spectrum. It's not an area where regular free market economics apply. GP's proposal would actually make it easier for startups to horn in on the territory of the big established players, since the underlying infrastructure would effectively be socialized.
It's questionable if the FCC is really optimal though. There are huge amounts of spectrum still devoted to dying industries like AM/FM radio and broadcast television.
Going 4 to 3 sucked, let’s go all the way to a state monopoly!
Anything less is giving companies control over something they should not have control over.
Another on 'built by private industry, but owned by the public.'
Government ownership isn't a panacea and has historically faultered when faced with innovative and expert requirements.
But I do think anything that trends towards monopoly makes sense as 'let the public own the simplest level, exposed via standards, and innovation happen above and/or below that.'
Roads is a very common argument, but none of the roads are build by "we the people". Government takes your money by force irrespective of how you think it should be spent and then a completely unaccountable red tapy system that employs otherwise unemployable people decides how to spend it. After a massive waste you have some roads which are poorly built even worse maintained.
There is no need for roads to be public infrastructure. It can be fully privatized and people be asked to pay for its use. (While entire compontent of taxes that go towards road building be returned back to the people.)
We will have better roads, less traffic and more money in pocket with that model.
Oh good grief.
> We will have better roads, less traffic and more money in pocket with that model.
I call bullshit.
As evidenced by the many successful and popular real-world cases where it's played out exactly this way. For example, um, uh...
The "accountability" is people voting in/out politicians. I agree they need more accounability, but in this case the folly falls on the ignorant for not properly researching who will lead and manage their towns.
>There is no need for roads to be public infrastructure. It can be fully privatized and people be asked to pay for its use.
Sounds like an awful idea. Land isn't infinite, so it falls into the same problem we have with housing. Lots of inefficiently crafted roads and a nightmare of tolls to manage based on the route you take. Which finals down to a few big boys either battling for the best roads, or worse, colluding with each other to keep tolls high. Navigation now has to incorporate not only for physical distance, but approximate cost as well.
I fail to see an upside here unless your underlying narrative is to force people onto public transportation. Even then that doesn't mean public transportation imroves for those with bad access (also managed by "unaccountable red tapy system")/
The walls here are defined by physics. There's only so much spectrum to go around.
You can't have more than 3-4 large cell phone operators working in the same area. Decoupling the radio part and forcing everyone to play as MVNOs is a way to work around this.
Modern protocols do magic things with spectrum efficiency, but there's only so much you can do.
Running a small number of powerful radios on low-frequency spectrum is a cost-effective way to cover large areas. Physics constrains how much of that can happen in the same area. But if networks are willing spend cash, they can get a ton of capacity by densely deploying high-frequency radios. Don't think we're anywhere near hitting the walls on what's possible there.
Putting this another way, networks provide enough bandwidth for everyone in Manhattan. It's just expensive.
That's still not a lot of spectrum. And you need to share it with other consumers (WiFi).
Then you start getting into the practicalities. You'll need to spam EVERYTHING with your access points. Can you imagine dozens of different wireless providers installing access points on every floor of every building? It's just not going to happen.
All kinds of more experimental community networks make use of it. Even better, Magma core is a free 5G core and multiple vendors like Baicells make cheap 5G CBRS base station hardware. CBRS also fully overlaps international 3.5GHz 5G bands, so phones and modems are cheap.
The private market would have provided a bounty of suitors for Sprint if it couldn't recover from bankruptcy. It may have emerged in a far weaker fourth place, but it would still be around.
I'm not suggesting the merger was "good" or anything like that. Just that the other options seemed quite unlikely.
You could easily do cell-tower-maintenance truck-rolls from offices in Vancouver BC to towers in Seattle or Portland; from Toronto to Buffalo (or, less plausibly, to Chicago); or from Montreal to Boston. And that's only if they even bother to operate towers — if they tried today, they could just as well operate as pure MVNOs.
In fact, flagship plans on Canadian carriers today, already usually build in no-cost full-speed US roaming data access through partnership with US carriers operating on the same frequency bands. It's a very short distance from there to operating an MVNO atop the same carrier's network.
(I would say that I'm surprised they haven't tried to do this already; but until recently, Canadian carriers were addicted to the extremely-high-profit-margin rate plans they built up through oligopolist price fixing. Our current government has seemingly broken that up for now, with much cheaper plans finally appearing — so they might finally decide it's time to expand their TAM to stay profitable.)
https://www.pcmag.com/news/att-ast-spacemobile-promise-true-...
This situation seems extremely similar to the failed Spirit/Jetblue acquisition [1].
[1] https://www.bloomberg.com/news/articles/2024-03-04/jetblue-a...
Being acquired by a competitor wasn’t their only exit option, and pretty much anything else would’ve resulted in more competition.
But it is historically far and away the most likely one.
Allowing an anti-competitive merger simply because the alternatives for Sprint shareholders were bad is a bailout by any other name.
Could things have been done differently? Sure. A condition of the merger could have been guaranteeing MVNO access or selling off a portion of the spectrum (maybe that happened).
But T-Mobile, combined with Sprint, went from being a distant competitor in subscriber numbers competitive. If sprint was "sold off" separately, T-mobile would most likely eventually run out of steam and end up like Sprint. They just wouldn't have the number of subscribers to amortize costs down the way AT&T and Verizon could.
Keeping struggling, small players going somehow would likely of only delayed the inevitable.
Unless you can show me how a cellular company that and backed itself into a technological dead end (and built up enormous debt during said process that sapped most of the money it earned to service) and needed quite possibly multi-tens of billions to even catch up to the others, you're not really adding to any conversation. If it was possible, business-people with more money and brains than either of us would have leapt at the opportunity.
The only alternative I can possibly think of is taxpayers ponying up - but that would in the end mean that consumers would "pay" indirectly, to say nothing of the moral hazard costs of government bailing out private businesses (works so well in the financial industry, doesn't it?).
An external acquirer would almost have to build from scratch after absorbing all the legacy costs and run the risk of inheriting Sprint's bad business decision culture or spending an enormous sum building out a new team. Of course, they'd still have to support the old and new setups at the same time for awhile as the new stuff was built out. The ROI would have been decades at best.
With a merger with another telecom, people can be migrated over already existing infrastructure (with some upgrades to deal with new traffic) and have sprint's old spectrum slowly merged into the existing infra.
I'm oversimplifying of course, but one gets the idea.
That never would have happened without Softbank buying them however.
https://en.wikipedia.org/wiki/Joseph_Nacchio
EDIT: more info here: https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished...
In March 1998 Qwest announced it would acquire long-distance carrier LCI International Inc. for $4.4 billion. The deal created the fourth-largest long-distance carrier in the United States behind AT&T, MCI Worldcom, and Sprint Corp. The combined companies had about 5,800 employees and revenue of $2.3 billion. The acquisition gave Qwest 2 million long-distance customers and a well-established sales force.
Oh nothing. Move along, nothing to see here.
Sometimes when companies are trying to merge, executives from both sides will come out and say it's "necessary" and push the narrative that one or both will go bankrupt without the merger. In cases where that strategy doesn't work it, unsurprisingly, turns out to be a lie. The companies will just keep competing and figure out a way to operating as usual. (I remember reading not-too-long-ago about an example of this exact thing, but don't remember what it was)
So personally, I don't trust anything a business says when a merger is on the table.
The main reason they were attractive to T-Mobile is that large amount of spectrum they owned, which was very valuble for 5G.
https://www.rcrwireless.com/20160401/featured/worst-week-bol...
Exactly. If you map out all the MNOs around the world in each and every country the trend is very clear where they merge to around 3 - 4 MNOs depending on population density. It is both economical and technical decision, I wouldn't even put it in the category of "least of all evils".
Sprint lost money basically every year after they merged with Nextel (having to pay for rebanding was part of it).
For example, Albertsons is blatantly doing this so Kroger can acquire them.
https://www.opb.org/article/2022/11/12/oregon-ag-files-court...
Letting employees loot the company for their own profit isn't any better.
Anyways, they knew the game. Bankruptcy auctions are essentially debtors recouping as many of their costs as possible before writing off the rest (further minimizing future taxes).