Deutsche Telekom's T-Mobile to buy SunCom

I think we all saw this coming.

 

And when did T Mobile buy part of Suncom? This should be good for T Mobile and hopefully getting larger and spending more does not end up effacing their competitive pricing and actually end up to be a policy maker that might get the larger ones to wake up and start matching their offerings instead of the 2 large ones mimicking their offerings.

 

It's about time

 

Here's the press release:

T-Mobile Agrees to Acquire SunCom Wireless to Expand Network and Industry-Leading Customer Service to the Southeastern United States, Puerto Rico and U.S. Virgin Islands: Financial News - Yahoo! Finance

 

Oh, awesome. I've been waiting for this for years. Glad they finally did it.

 

Glad to hear they finally did this, I wonder if they were waiting for Suncom to fix themselves a little more to keep their costs down after they bought Suncom?

Well I am sure it will be approved & this is good news for all those people with Suncom & will help T-Mobile compete in some new markets.

 

Suncom has improved their financials over the last year. Thier private equity partners will be rewarded.

 

This is great news! T-Mobile is finally coming to the Carolinas and the Tri-Cities with this buyout.

 

Watch out for price hikes. Mergers tend to lead to that sooner or later.

 

I'm just glad this finally happened. I think we've been talking about this for 3 years now...

 

I don't think T-Mobile is going to be doing that soon Larry, I think they need to stay very competitive price wise to raise their total customer base closer to Sprint-Nextel before they start doing too many price increases.

 

I'm in agreement with you on this Tom. Suncom isn't going to ad tens of millions of customers, so T-Mobile wouldn't have a real need to increase their rates, unless they want to get greedy.

 

More sources:

Charlotte Business Journal: T-Mobile to buy SunCom Wireless for $2.4B - Charlotte Business Journal:

Philadelphia Inquirer (Philly.com): T-Mobile buys local SunCom Wireless | Inquirer | 09/18/2007

Red Herring: T-Mobile to Buy SunCom for $2.4B

Alley Insider: Silicon Alley Insider: T-Mobile Goes Shopping (DT), More Wireless M&A Ahead

Boy Genius Report: T-Mobile to buy SunCom for .4B | The Boy Genius Report

The Motley Fool (fool.com): Yet Another Big Wireless Buyout

 

Initially would say this is correct, but also one has to look at the business side, T Mobile now knows that it needs to wait longer to recoup its new spectrum costs add to it the cost of acquisition(s) and the end result would be added costs much lower APRU and much lower profits. To circumvent this T Mobile will first try the fire price approach to entice as many as possible then start raising prices to average some where between the top 3. I give that no more (at most) 2 years to start happening.

 

With their coverage they'll always have to price themselves below AT&T and VZW, IMHO — that's practically their only attractive point (unless you count marketing gimmicks like myFavs).

 

Does SunCom use both the 850 and 1900 band?

 

No, SunCom only operates GSM on the 1900 Mhz band. This makes them a perfect fit since T-Mobile is also just a PCS carrier on it's native network.

 

I think T-Mobile will start singing "Sweet Home Carolina" soon. I'm really glad they're filling a major hole in their network with this purchase.

 

Lol I think most people would gladly take a little price hike, but get away from Suncom, lol.

 

But the problem with that is that all of these mergers over time could lead to price increases for everyone on all carriers. It's not just about this one merger but they all add up. That's why I don't want to see any additional mergers (especially between any 2 of the top 4 carriers).

 

I know what you mean. It truly is sad to see so many of those smaller carriers go away. In some cases, these small carriers actually have higher plans/costs than the carriers buying them, but most of the time those smaller carriers are a great competition and I am afraid we will only see more mergers as time goes on.

 

I disagree- T-Mobile generally has an excellent network in the areas they cover, and they cover most metro areas and highways, and now their biggest roaming area is going to disappear. I think T-Mobile's native coverage is great and their roaming coverage makes up for the lack of some of the rural coverage, but with T-Mobile service to the user it doesn't matter whether they roam or not- all features stay the same.

 

So what's next? US Cellular and Verizon maybe? Once that happens I bet we will see the beginning of another round of price hikes. After the Sprint/Nextel and AT&T/Cingular mergers we got some price hikes but I think it fell under the radar of most people.

 

I hope Verizon, nor Cingular or Sprint gobble up anymore of the larger regional carriers. If they make acquisitions, they should go after the small carriers. U.S. Cellular, ALLTEL, Leap, Metro and some others should all merge together to form another competition to the national carriers in a lot of markets. This may be better for consumers than the big 4 gobbling up more carriers.

 

Too bad Alltel is off the market for a while while they close their pending sale.

 

Wow! I'm so shocked! I would've never though that T-Mobile would try to buy Suncom!

LOL! About damn time! I'm glad T-Mobile has decided to follow our advice. I never thought I would see the day of this news release.

The difference here is that Sprint/Nextel and AT&T/Cingular were considered "Mega-mergers". They can't be compared to T-Mobile acquiring Suncom or Verizon acquiring US Cellular.

In the case of these small mergers, only the customers using old plans in the acquired carrier could see price hikes as they are moved to the newer price plans imposed by the carrier buying them. These small carriers were more flexible with special offers, but that will only affect a small number of people since it was a regional carrier anyway.

 

T-mobile will now be able to expand into more rural areas over here, something SunCom really hasn't done.

And there are still some well-known cities and highways in the Carolinas/GA with no SunCom,
such as Boone, Albemarle, Cheraw, Toccoa, I-73/74 S of Asheboro and US-74 between E of Asheville & Shelby (near Charlotte)

Currently most SunCom coverage is in cities and along some major highways.

Here is SunCom's (future T-Mobile) area map. Note that T-mobile coverage will overlap in the Savannah & Augusta, GA markets

 

So you don't think that after a number of these smaller mergers we could also see price hikes? I believe that any time you eliminate competition there's at least a chance that could lead to eventual hikes.

 

Andy, I'm at a disadvantage here — the only T-Mobile network I'm really familiar with is the CA/NV one (which is full of holes here in Bay Area), but it's not really T-Mobile's exclusive — they inherited it from Cingular, so maybe now that they own it they'll take better care of it.