T-Mo Blues, T-No Maverick

by Mike Wendy on June 29, 2012

According to news reports yesterday, T-Mobile’s USA Chairman, Philipp Humm, resigned, leaving for another competitor, and putting the ailing wireless carrier temporarily in the hands of its current COO.

You may remember that during the proposed merger last year between it and AT&T much was said about T-Mo’s number four status in the marketplace – one which ostensibly played an important maverick role in checking the top three competitors from overreach and consumer harm.

When the DoJ sued to stop the merger of AT&T and T-Mobile, it claimed that:

AT&T’s acquisition of T-Mobile would eliminate a company that has been a disruptive force through low pricing and innovation by competing aggressively in the mobile wireless telecommunications services marketplace. (Emphasis added)

Agitator-in-Chief in the efforts to derail the deal – Public Knowledge’s Harold Feld – played-up the importance of the so-called maverick role on the relevant marketplace, using a court ruling on an unrelated business merger to prove his point. Here, Feld trumpeted:

The judge in the H&R Block case ruled that one of the largest companies in a competitive industry could not buy out a competitor, particularly when that competitor is seen as a maverick within that industry.

Hmmm. About this maverick business…

As the Wall Street Journal hinted at today, maybe maverick T-Mo, which is owned by Deutsche Telecom, ain’t (wasn’t) so maverick-y after all. Perhaps instead, the only maverick-ing they’ve wanted these past couple of tough years was to get on their high horse and quickly exit Dodge:

Seems to me that for a maverick to truly be such, it must wield a viable and sustainable business model. With news coverage that reads “No. 4 U.S. Wireless Provider Seeks New leader as It Struggles to Keep Pace,” that hardly sounds like the market-checking maverick Harold Feld and the DoJ claimed it was.

Ex-Clinton official, Everett Ehrlich, noted (and predicted) here last October that T-Mo was (is) probably more zombie than maverick.

I think so, too.

The DoJ and FCC should have allowed AT&T to kill that zombie…er, maverick. Dodge could’ve used the improved infrastructure; better, more sustainable competition; and, of course, agencies that actually promote wireless growth instead of sheriffs who act like Keystone Cops, and, though seemingly well-intentioned, cause more harm than good.

{ 2 comments… read them below or add one }

gator Dad June 29, 2012 at 1:45 pm

More jobs out the window. Corporations are criticized for hoarding cash; but when they are willing to invest; regulators slap ’em on the wrist as they reach for their pocketbook. What hypocrites this administration has wrought.

Reply

BE June 29, 2012 at 6:42 pm

The real issue is market power by att and vz, for example they control special access in 40% of the country each so those costs are a wash for them, TMO and Sprint have to pay…..telecom is broken in the US due to FCC regulatory capture by Twin Bells…..look at the revenue and profit….monopoly (special access), duopoly (retail BB) and oligopoly (mobile) businesses here in America…..American consumers lose

Reply

Leave a Comment

Previous post:

Next post: