Sprint and T-Mobile nearing merger agreement

T-Mobile and Sprint, respectively the third and fourth largest wireless carriers in the U.S., are nearing a merger agreement, undisclosed sources told Reuters Friday. A due diligence period would follow the finalization of the agreement’s terms, but the companies expect a deal by October, according to Reuters’ source.

In August, Reuters says, Sprint CEO Marcelo Claure said an announcement regarding merger talks would come in “the near future.”

The merger proposal would be the first one “with significant antitrust risk” to be submitted to the Federal Trade Commission since President Donald Trump took office, Reuters notes. The President was elected on a platform that included the deregulation of the business environment.

Mayoshi Son, the founder of Japanese venture capital firm SoftBank, which controls the Sprint Corporation, met with Trump in late December, just after the former tycoon won the election.

Son found Trump’s business policy potentially favorable for SoftBank, and promised to invest $50 billion in the U.S. economy and to create 50,000 jobs.

A merger proposal would evince Son’s confidence that the regulatory environment has become laxer since Sprint and T-Mobile abandoned a merger proposal in 2014 amidst pressure from the FTC.

Indeed, the FTC might be more receptive to a transformative merger in the telecom industry now than it was three years ago. Earlier this year, Reuters says, FTC Chairman Ajit Pai said “effective competition [exists] in the marketplace for mobile wireless services.” Thursday, the agency will vote on whether to submit Pai’s report on the state of competition in the wireless services market to the U.S. Congress, which requires such a report annually.

But, the terms of the new merger will likely be less advantageous for Son and Sprint than those reached in 2014. Under the previous deal, Sprint would have controlled the combined company, while T-Mobile’s parent company, Deutsche Telecom, would have become a minority shareholder.

Over the past three years, though, T-Mobile has outperformed Sprint. Accordingly, the terms of the new agreement will likely flip, Reuters’ source said. Deutsche Telecom and T-Mobile stockholders would own a majority of the combined enterprise, while SoftBank and the rest of Sprint’s shareholders would have a minority stake.

T-Mobile CEO John Legere, who took the reins in 2012 and has guided the company’s surge, will likely run the combined company.

The merged enterprise would have 130 million subscribers, Reuters notes, making it the United States’ third-largest wireless carrier, behind AT&T, which had 136.5 million subscribers as of July, and Verizon, which reported 147.2 million subscribers that same month.

Sprint’s market cap of approximately $34 billion, combined with T-Mobile’s $53 billion figure, would give the new company a value of around $87 billion. AT&T’s market cap is about $237 billion; Verizon’s exceeds $205 billion.

Sprint reported annual revenue of $33.3 billion for fiscal 2016, which ended March 31. T-Mobile posted $37.2 billion in annual revenue for calendar 2016. So, the combined company would likely generate over $70 billion annually.

Verizon posted consolidated revenues of $126 billion and wireless revenues of $89.2 billion in 2016. AT&T’s figure came in at $163 billion.

Analysts say the Sprint/T-Mobile merger provides ample opportunity to cut expenses as well.

In their bid for regulatory approval, the companies will likely emphasize that the combined company would create jobs by making investments in the development of 5G, the next generation of mobile internet connectivity.

But the merger will also precipitate layoffs as the new company consolidates its corporate structure, Roger Entner of Recon Analytics told Reuters.

According to Reuters, Sprint briefly pursued a merger with Charter Communications earlier this year.

The FTC continues to review another potential consolidation in the industry: AT&T’s proposed $85.4-billion acquisition of Time Warner.

Sprint shares jumped six percent Friday; T-Mobile stock rose 1.06 percent.

RootMetrics Releases Cellular Performance Data for First Half of 2017

On Tuesday, RootMetrics, a renowned independent research company that collects data on the reliability of cellular networks, released its report for the first half of 2017, Daniel Kline of themotleyfool.com reports. Testers drove 276,607 miles—further than the distance between the Earth and the moon— to perform just under 4.7 million tests of cellular performance.

Verizon once again came out on top overall, with a score of 94.5, but competitors closed the gap. AT&T received an overall score of 92.9; Sprint came in third with a score of 87.9, followed by T-Mobile at 86.5.1.6 points separated Verizon and AT&T, the range from top to bottom was a mere 8 points.

In the latter half of 2016, Verizon received an overall score of 93.9. AT&T scored 90.5, Sprint 84.7, and T-Mobile 81.2. Verizon and AT&T were separated by 3.4 points, and the range from top to bottom was 12.7 points.

The most recent report acknowledges that AT&T, Sprint, and T-Mobile all “made significant strides” in “metro-level performance,” which “provides the strongest gauge of a network for consumers.” RootMetrics considers not just “city centers” but “residential suburbs, business districts, recreational areas, and the highways that connect them” to be “metropolitan areas.” An overwhelming majority of consumers use their phones in such areas most of the time.

Verizon earned 617 first place awards in metropolitan areas. AT&T garnered 396, T-Mobile came in third with 271, and Sprint trailed the pack with 211. Verizon garnered 41 fewer first places than it did in the second half of last year, while AT&T picked up 24 more.

AT&T and T-Mobile “made big speed and reliability improvements in metro areas,” and even Sprint saw “significantly boosted data speeds and reliability at the metro level,” RootMetrics told The Motley Fool in an email.

Though RootMetrics claims the tests are impartial, some skeptics, including T-Mobile CEO John Legere, have argued otherwise. In an email to the media in February 2016, Legere accused Rootmetrics of severely handicapping T-Mobile in the study covering the second half of 2015.

“They manipulated their testing of the T-Mobile network, choosing to turn OFF Voice over LTE, our network technology that is on every single phone we sell,” the e-mail read. “VoLTE handles roughly 50% of calls made on the T-Mobile network. That is 250 million calls per day, or over 40 BILLION T-Mobile calls that RootMetrics just CHOSE to exclude in their latest tests. So the latest (and by latest, I mean up to 7 months old) RootMetrics results are worthless.

Legere claimed the “manipulation” was deliberate, and that “other carriers,” who “pay RootMetrics millions of dollars” receive favorable treatment in the tests.

RootMetrics told The Motley Fool it turned off VoLTE for the tests in question because “in the second half of 2015,” the feature “was only available on a small number of devices,” and “was not what the majority of consumers were experiencing.

“T-Mobile did add more VoLTE technology over the course of [the] last six months of 2015,” RootMetrics conceded, “but due to our rigorous scientific approach we do not switch out testing methodology for any carrier once our testing begins in a half.”

RootMetrics included VoLTE in its next report, regarding the first half of 2016, and in all subsequent studies.

Verizon is still the clear front runner among cellular service providers: it received 47 outright first place awards in metropolitan tests. AT&T was the next closest with 12 outright first places. T-Mobile won four, Sprint just one.

Last year, though, Verizon won 55 metropolitan tests outright. AT&T came in a distant second with 4 outright wins.

So, competition in the cell phone service sector is tightening, and consumers stand to benefit.

“Verizon is the leader with AT&T the clear No. 2,” Kline writes, “but for a lot of people, T-Mobile and Sprint have improved to the point where they are reasonable options, especially since they are the cheapest of the four major carriers.

Data Breach Exposes Millions of Verizon Customer Records

Verizon’s partner Nice Systems suffered a data breach that exposed the records of 6 million customers. The data was accessed through an unprotected Amazon S3 storage server, leaving records compromised by customer service calls facilitator. Verizon claims that despite the data breach no loss or theft of customer information occurred.

The records in question are logs from residential customers who had called Verizon customer service within the past 6 months. The cause of the breach was a misconfigured security setting on the server that would enable anyone who knew the website address to access and download the files. This is exactly what happened as an employee of Nice Systems accessed the unprotected Amazon S3 storage server. Thankfully, Verizon reports that no external party had access to the data, minimizing the potential damage scope to the single employee that will bear the burdens of their responsibilities.

Each record included the customer’s name, mobile number, and significantly, the customer’s account PIN, along with their home address, email address, and their Verizon account balance. While some records were partially redacted to protect the security and privacy of customers, most were not. This means that anyone with access to the records could have impersonated a subscriber and been granted access to their account, or have sold the information to third parties that could find a use for the data provided.

Verizon and Nice Systems have reported an investigation into the security breach, commenting that the data was part of a “demo system,” but refusing further elaboration. Due to the undisclosed nature of the context regarding the statement, it is uncertain as to whether this is fact, presupposing that the breach did not have as large an impact as it could have, or simply damage control. The breach was first discovered by Chris Vickery, a research working for cybersecurity firm UpGuard, who noticed the breach on June 13th. After privately informing Verizon, an investigation was conducted and the data was finally secured on June 22nd, nine days after the breach was initially reported.

This is not the first case of a data breach with a major mobile carrier, and this is not the first security breach for Verizon. In 2015, data broker Experian experienced a major breach that resulted in the exposure of similar information for 15 million T-Mobile customers. And in 2016, Verizon’s enterprise unit had data stolen by hackers, resulting in the exposure of information regarding IT services to companies that are put up for sale online.

Verizon and all mobile carriers need to a great deal more investing into cybersecurity to ensure that their customer’s data is protected. Regardless of whether the data is stored on a third party site managed by a partner, the ones responsible for the damage caused by the data breach is Verizon themselves. Customers place their faith in Verizon to ensure that their privacy is maintained and considering that this is not the first time Verizon has suffered a data breach, it is certain that Verizon’s reputation has taken a hit.

Regardless of the severity of the consequences from a data breach, the trust that customers place in Verizon is minimal at best. Looking on the lighter side, that this server was a demo suggests that the impact will be reduced, but even then it shows customers of the efforts Verizon goes through to fulfill their corporate social contract to the customer. Needless to say, these cybersecurity methods need serious updating and securing if Nice Systems ever wants to be partnered with a mobile carrier again. Only time will tell as to whether Verizon and Nice Systems compensate the customers for the data breach, beginning with whether more customers will have important private information redacted to minimize potential damages in case of another data breach.

Featured Image via Flickr/Mike Mozart

T-Mobile is Ahead of the Competition with More Data on its Unlimited Plan

In case you haven’t noticed, this year has brought about many changes when it comes to smart phones and their carriers. Many of the top carriers have begun offering unlimited data plans. Every announcement from one carrier is followed by an even bigger announcement from another. In order to stand against competitors, AT&T got rid of its triple-play requirement for those who chose its unlimited plan.

Every major carrier might have a different plan, but one thing remains the same for all of them. Once you fall over that monthly data usage number, the soft cap comes in effect. It’s called a soft cap because consumers aren’t cut off from the data completely and there’s no threat of an overage charge. Even though you aren’t being charged and they won’t cut you off, there’s still a limit that applies.

However the competition never really sleeps. In fact, T-Mobile increased its data limit in order to flag in more customers from rival mobile plans. T-Mobiles previous data limit used to be 28GB per month. Recently, though, the company has boosted that number up to 30GB per month. Once that number is reached during the month, you will be “deprioritized” during the peak times.

That 2GB increase might sound like just a smidge of raise, however, it has pushed T-Mobile up to the front of the line when it comes to data allowance. Its competitors, AT&T and Verizon stop the buck at just 22GB. Sprint, on the other hand, comes at number two with 23GB of data.

https://youtu.be/pvDxysWmmEE

If the word “deprioritize” caused you to scratch your head, don’t worry. It means exactly what you think. Other customers will be given top priority. This means that if you happen to be in a crowd of people, your data is going to slow down.

These data numbers, if you stop to think about it, are quite generous. There’s also no actually guarantee that there’s going to be perpetually slow internet once a user has come to the end of their data limit. These numbers are, however, something to consider if you or someone on your plan happens to be heavy handed when it comes to data usage.

AT&T Announces New Unlimited Plan

With Verizon, T-Mobile, and Sprint coming out with unlimited data plans to bring in more customers, it was only a matter of time before AT&T joined in. The company announced that starting February 17th AT&T says it will be offering a new unlimited data plan for its consumers.

Even though each company is coming out with a new unlimited data plan, neither wants to be outdone by any of the others. That brings about extra incentives like extra gigabytes of data and even Verizon has an offer for free iPhone 7, or iPhone 7 plus with the switch to its unlimited data plan.

As for AT&T, the company is allowing any postpaid customers to get in on its unlimited data deal. This means that customers don’t have to have a DirecTV or U-Verse subscription in order to be a part of the unlimited data plan.

The unlimited data plan provides users with unlimited data, talk, and text. One single line will cost about $100 per month. If consumers chose the family of four plan they will pay an initial cost of about $220 until a credit of $40 begins after two billing cycles. After the two billing cycles, the fee will be $180.

The plan also promises its users the ability to make unlimited calls from the United States to Mexico and Canada. It doesn’t stop there. The plan allows for unlimited texting to more than 120 countries. Also, if customers add the Roam North America option they won’t have to worry about any roaming charges. However, just like many of its competitors, AT&T has a soft data cap. After 22 GB of data usage, speed might slow down a bit when the network gets overfilled.

One thing about AT&T’s new unlimited plan is that there is no tethering. This means no HotSpot. Anyone who wants to use their smartphone at a HotSpot will be placed on a capped data plan.

Another feature of the new unlimited plan is the stream saver. This will bring down videos to 480p, but customers have the option to turn this off if they so choose.

However, despite calling this plan new, it doesn’t seem to add anything of the sort. In fact, when compared to the other plans not only is the lack of 4G LTE tethering undesirable but with the plan at $100 per month for one line, AT&T is the most expensive.

Verizon To Introduce Unlimited Wireless Data Plan

Verizon introduced an unlimited data plan for the first time since 2011. The nation’s largest wireless provider announced the move away from monthly data allowances on a TV advertisement during Sunday’s Grammy Awards broadcast.

The plan, starting at $80 per month, brings Verizon up to speed with competitors that already had unlimited data offerings, like AT&T, T-Mobile, and Sprint. “Verizon was sitting out there as the only one that didn’t have an offering,” said senior equity research analyst David Heger.

Sprint and T-Mobile released marginally cheaper unlimited plans last summer, which helped bring in millions of new customers. According to Verizon’s wireless division president Ronan Dunne, the company came out with the unlimited data plan because its network is capable of handling the influx of customers, and  “fundamentally want you to have more choice.” Previously, the company said it had no interest in pursuing an unlimited plan, but the curbed growth of wireless customers at the end of last year may have motivated the change in approach.

The new plan, available since Monday, allows customers to talk, text, and use data as much as they like per line, although, like competing plans, it has a “soft cap” of 22 GB per month. After this much data has been used, download rates could be slowed and usage prioritized for overall network efficiencies. Unlike Sprint and T-Mobile, however, Sprint said it would not downgrade the streaming video quality for users on the unlimited plan.

John Legere, T-Mobile CEO, was quick to tweet a response to Verizon’s plan: “No shock that @verizon finally decided to show up. And I don’t blame them for caving. What choice did they have?” Legere kicked off the move toward unlimited data plans in the industry, which he suggests motivated Verizon’s plan in the beginning of his Feb. 13 Twitter thread.

Legere continued to ridicule Verizon’s announcement in his Twitter thread before making a plan announcement of his own. “Starting Fri, #TMobileONE price includes HD video & 10GB high speed hotspot data– all at no extra charge. AND taxes & fees are included!”

Verizon contradicted analyst predictions by offering the unlimited plan, since the carrier has relatively less available spectrum per subscriber than smaller carriers. Dunne assures that the carrier’s additional advanced equipment can handle the traffic, “We’ve built our network so we can manage all the activity customers undertake.”

T-Mobile Tuesdays Offers Free Data for Pokemon Go

The Pokemon Go craze is still going strong and businesses are taking advantage of the craze. T-Mobile isn’t going to let such an opportunity go to waste, so T-Mobile is offering free data for Pokemon Go for a year starting Tuesday.

To claim this free data, T-Mobile users have to download the T-Mobile Tuesday app and claim the free data offer. The offer will be available starting July 19 and will be offered every Tuesday until August 9.

This week’s T-Mobile Tuesday is Pokemon-themed. In addition to free data, T-Mobile Tuesdays is offering its usual free ride up to $15 from Lyft to “get to your next Gym battle”. T-Mobile is also offering its sponsored free Wendy’s frosty for both Pokemon trainers and non-trainers alike.

A new offer has been added to T-Mobile Tuesdays that promises 50% off on all charging accessories for Pokemon Go players. Even for those who aren’t catching Pokemon, 50% off on a new power bank isn’t a bad deal if your phone consumes a lot of battery.

Although it sounds like T-Mobile is losing money by offering free data, they aren’t. Pokemon Go only uses from 5 to 10 megabytes an hour so if you have a 2GB data cap, you’d have to play 200 hours a month to surpass the data cap.

Despite the overall positive feedback from T-Mobile’s free Pokemon Go data, some critics argue that this move violates net neutrality (a principle that states that all types of internet traffic should be treated equally). Technically speaking, T-Mobile isn’t violating any of FFC’s rules. T-Mobile isn’t making Pokemon Go servers faster, and they’re not blocking games similar to Pokemon Go. T-Mobile is, essentially, using a tactic known as zero-rating.

Zero-rating is the idea that by making one game cheaper to play, you’re making other games seem more expensive. Since T-Mobile is only offering free data for Pokemon Go, other games that require data will be more expensive to play. This tactic may potentially get people to hesitate when playing other games that require data.

It is very unlikely that the FFC will stop T-Mobile’s new Pokemon promotion. FFC didn’t stop Binge On, a free video streaming program, so it would be hypocritical to see Pokemon Go suffer consequences.

T-mobile Expands Wi-Fi Service

T-Mobile announced the expansion of it’s Wi-Fi telephone and texting, facing the new iPhone 6 includes this feature.  The carrier presents the “Wi-Fi Unleashed” the service that the clients can make call and text over a Wi-Fi network. 

The company also signed a deal with GoGo, an inflight service that allows text messages,  image messages and visual voicemail in any U.S.  based airline flight.  With this partnership the carrier allows the users to make a limited text and visual voicemails.  The company is exploring the field of the in flight paid service. 

With Wi-Fi calls the carrier is betting to the quality of the calls and make them stronger. This will allows  users to make calls from places where, until the moment the cellular signal is weak or the calls may fail.

The carrier is also offering a “Personal CellSpot” which is a special router that customers can have after making a $25 refundable deposit and have a compatible smartphone.  The router offers the highest speed and prioritized the T-mobile’s wifi calls.  It can works also with the Wi-Fi home router.

 

T-Mobile Lowers Family Plan Price

T-Mobile announced a lowered-price family July 28 with 10 gigabytes of 4G LTE data for a family plan of four for $100.

John Legere, CEO of T-Mobile, said in a blog post that the carrier would offer 10GB of LTE data for a family of four, each line would have 2.5GB, starting July 30.

According to CNET, T-Mobile customers can sign up for the deal through September, and it will last until the end of 2015. T-Mobile said the promotion is available for both new and current users.

“We know that this is one of the busiest shopping seasons in the year, and we expect that this is going to be a really, really popular, powerful option for customers in the market,” Mike Katz, the company’s vice president of marketing, said. “We have really high expectations for this.”

Legere not only introduced the new deal in the blog post, but also compared it with one of its giant competitors AT&T’s family plan.

“It infuriates me that they’re selling this [$160 for 10GB data shared by four lines] to hardworking families who could use that money for more important things.  And they have the nerve to call it ‘Best-Ever Pricing.’  I just couldn’t stand by without speaking up and calling them on their BS,” Legere wrote.

This price cut is another aggressive step of T-Mobile, the fourth-largest in the U.S. by subscriber base, to enlarge its customer base, followed by free early termination fees to get out of users’ original contact.

TMobilenewdeal--RHD

 

T-Mobile Hides Fees in Phone Bills

According to the Federal Trace Commission (FTC), T-Mobile has been placing hidden charges in phone bills for premium third-party text messaging services. The FTC claimed that T-Mobile has made “hundreds of millions of dollars” through these charges in a practice known as “cramming.”

The premium services included horoscopes and celebrity gossip, and costs $9.99 per month. Consumers usually signed up for these services through ads on their phone or on a website. The services were supposed to require payment authorization twice, but T-Mobile had an agreement with these third-party services to charge customers automatically.

On a monthly bill, these mystery charges sometimes appeared as “usage” charges, coupled with a vague description of the service, often presenting a nonsensical set of numbers and letters. Pre-paid customers who did not receive a bill had the fraudulent charges debited from their accounts without their knowledge. This resulted in unsatisfied and overcharged customers.

The FTC claimed that T-Mobile did not clarify who was charging them for the services on their phone bills. Moreover, some customers did authorize the payment, but T-Mobile could not provide any evidence to support it. An eyebrow-raising 40 percent of customers asked for refunds, which should have tipped off T-Mobile to a serious problem. FTC’s complaint also alleges that T-Mobile’s full phone bill, often longer than 50 pages, made it incredibly difficult for customers to spot third-party charges.

The FTC hopes to force T-Mobile to pay back customers for fraudulent charges and put a stop to bill cramming throughout the cell phone industry. An FCC investigation could result in a fine for T-Mobile. Other mobile carriers have paid an enormous price for deceptive fees. In June, Lin Mao, in addition to a long list of corporate defendants, agreed to surrender $10 million in assets for cramming their customers through numerous companies.

 

tmobile-samplebill
via ftc.gov