T-Mobile

DT and Sprint: Acquisition in the making?

There are financial rumors that DT is looking to buy Sprint, whichwas enough to send DTs stock down in Europe today. DT is said to be looking to boost its T-Mobile brand in the U.S., which is number 4 in terms of wireless providers, and to get access to spectrum and the cable MSO deals Sprint has.

There are still questions about Sprint’s viability, which is what has German markets upset. We think this might be at least the beginnings of a good deal, although how it would fare with regulators is much harder to predict. T-Mobile and Sprint are both too small to be effective competitors, but any loss of market players might spook both the FCC and the FTC.

Huawei’s T-Mobile LTE win shows revenue concerns

Huawei, which recently appeared to reaffirm its guidance on sales growth for the year, has won an important T-Mobile trial in Austria. The deal gives Huawei the largest LTE field trial in Europe to date and reaffirms that the Chinese equipment giant is making real strides in the important mobile market.

We think Huawei’s rise in mobile is also an indicator that operators are concerned mobile margins won’t last, perhaps due to the inevitable commoditization of services created by mobile web, smartphones and netbooks. The pricing pressure in mobile is ominous for equipment vendors overall, we think, because it shows that there is little chance that any basic infrastructure will hold margins anywhere over time. That means it’s service layer or nothing

Google and wireless regulation in the U.S.

There’s more debate on the smartphone VoIP front as both Google and T-Mobile deny there were any deliberate restrictions placed on Skype for the T-Mobile Android handsets. Google said there was no full-feature Skype implementation offered as yet for Android, and T-Mobile said it had put no pressure on Google to restrict VoIP applications.

All of this stems from the fact that Apple limited iPhone Skype to WiFi connections and blocked Google Voice (for, said Apple, reasons of lack of support for the iPhone’s distinctive GUI). We think these issues may combine with the Comcast net neutrality appeal to create some momentum for legislative intervention, though the FCC may also look into the matter. If the FCC takes action, it may help uncover just what basis the FCC will claim for regulation of net neutrality issues; the net neutrality principles published by the FCC were not part of an order and thus have no direct legal status.

T-Mobile to shake up prices; pressure mobile market

T-Mobile may be about to launch the Great Mobile Price War, with dramatic consequences for the whole market. The company is expected to announce a $50 per month unlimited usage plan, undercutting competitors by half and potentially further pressuring the monetization model for mobile services.

The issue here is a familiar one: Feature differentiation in voice and mobile services has not been successful in luring customers, and so price is the only option. Generally those with smaller market shares and thus more to gain are early movers in price cuts, and T-Mobile fits that mold.

If the company also links in premiums related to its FMC offering, the result could be to force operators to reduce costs and advance their FMC plans. That, we believe, might actually hurt 4G, IMS and traditional approaches simply because it constrains ROI and focuses on shorter-term objectives.