From DSLreports:
Last week a law firm working on AT&T's planned $39 billion acquisition of T-Mobile accidentally shot the company's primary merger benefit talking point in the foot, after publicly posting a largely-unredacted document to the FCC website. AT&T's primary justification for the T-Mobile deal has long been that AT&T couldn't possibly match Verizon's planned 97% LTE coverage without acquiring T-Mobile. Yet the letter (pdf) clearly illustrates that AT&T was unwilling to spend the $3.8 billion it would cost to push LTE coverage from 80% of the country to 97% -- despite AT&T marketing department concerns that this would leave them at a competitive disadvantage to Verizon.
AT&T's damage control on the leaked document appears to be to tell news outlets that the letter contained no new information and was "consistent with AT&T's prior filings." Except that's simply not true. The letter clearly illustrates for the first time that AT&T management repeatedly rejected proposals to push their LTE plan from 80% to 97% of the country at a cost of $3.8 billion. This week, AT&T's trying to convince outlets like Politico (the article is buried behind their "Politico Pro" paywall) that the $3.8 billion number is how much the 80-97% coverage bump would cost after the acquisition of T-Mobile:"Our August 8 letter to the commission is fully consistent with and confirms AT&T’s prior filings," said Claudia Jones, a spokeswoman for AT&T. "Simply put, AT&T would not be able to deliver 4G LTE to 55 million more Americans without this merger."...According to AT&T, the $3.8 billion figure refers to how much the wireless build out from 80 percent of the country to 97 percent of the country will cost with acquiring T-Mobile.
This figure is part of the $8 billion investment the company plans to invest if the transaction is approved, AT&T maintains. "This expanded commitment also means that our merger will create many thousands of well-paying jobs by unleashing billions in badly needed investment, both of which are vitally needed given our weakened economy," Jones said.
It's fairly astounding, even in the modern age of public relations, that there is absolutely nothing in that statement that's true. For one, we've noted how eliminating T-Mobile will result in an overall reduction in network investment of $10 billion, and that AT&T's job creation claims are inflated if not downright illusory, especially in the face of AT&T's continued landline job reductions. As for the $3.8 billion price tag, the letter clearly states that AT&T executives repeatedly rejected this specific number as too pricey before the merger was proposed:AT&T explained its decision in January 2011 to reject a proposal from AT&T's marketing organization to expand LTE coverage beyond the areas covered by the Plan of Record. AT&T noted that prior to January 2011, senior management had considered and rejected such proposals on numerous occasions, finding each time that there was no viable business case for the proposed expanion. When, in early January 2011, senior management again revisited the decision, it came to the same conclusion. It found that expanding coverage from AT&T's Plan of Record to 97 percent of the U.S. population would require AT&T to almost triple the land mass covered by its LTE network, from below 20 percent of the United States to approximately 55 percent and that providing LTE services to areas outside the Plan of Record would cost nearly twice as much per covered person in capital expenditures. All told, AT&T estimated that this expansion would cost approximately [Begin Confidential Information]$3.8 billion [End Confidential Information].
In the letter, AT&T states their rejection of the $3.8 billion price tag was driven by their belief that their HSPA+ network would be good enough for those remaining 17% of consumers, not because AT&T lacked the resources to make a larger shift to LTE:Given this high cost and AT&T's plan to deploy HSPA+ service to 97% of the population by the end of 2012, AT&T senior management concluded it could not justify expanding its LTE footprint beyond the Plan of Record, despite the potential marketing and competitive benefits of doing so. Specifically, AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified.
Again, AT&T's clearly saying in the letter that the $3.8 billion total was the number presented to executives before the T-Mobile merger was proposed, meaning that the total would be even less after the deal is completed. The letter claims AT&T executives rejected this $3.8 billion total due to its high cost, yet just a few weeks later were supposedly willing to spend $39 billion -- primarily to achieve the same goal. As we noted last week, this raises serious questions about whether AT&T is sending $39 billion to Germany in order to eliminate T-Mobile and place Sprint in a highly unstable competitive position in the face of AT&T/Verizon 80% market dominance.
So not only does the letter contain new data, it demolishes AT&T's claim that they couldn't achieve full LTE coverage without acquiring T-Mobile. AT&T has the resources for 97% LTE coverage -- they make nearly enough in one quarter to achieve this goal. Executives (already under fire for skimping on network investment resulting in the 2009 iPhone PR fiasco) simply didn't want to. They were, however, happily willing to shell out $39 billion to secure market dominance for the next two decades. The FCC has this data since the letter recounts a meeting between AT&T and FCC staffers, so if the agency approves the deal they'll do so knowing full well the majority of its supposed benefits are documented as false.
AT&T Blows Smoke to Cover Leaked Document Snafu - Pretends Damning Letter Offered No New Info | DSLReports.com, ISP Information
Last week a law firm working on AT&T's planned $39 billion acquisition of T-Mobile accidentally shot the company's primary merger benefit talking point in the foot, after publicly posting a largely-unredacted document to the FCC website. AT&T's primary justification for the T-Mobile deal has long been that AT&T couldn't possibly match Verizon's planned 97% LTE coverage without acquiring T-Mobile. Yet the letter (pdf) clearly illustrates that AT&T was unwilling to spend the $3.8 billion it would cost to push LTE coverage from 80% of the country to 97% -- despite AT&T marketing department concerns that this would leave them at a competitive disadvantage to Verizon.
AT&T's damage control on the leaked document appears to be to tell news outlets that the letter contained no new information and was "consistent with AT&T's prior filings." Except that's simply not true. The letter clearly illustrates for the first time that AT&T management repeatedly rejected proposals to push their LTE plan from 80% to 97% of the country at a cost of $3.8 billion. This week, AT&T's trying to convince outlets like Politico (the article is buried behind their "Politico Pro" paywall) that the $3.8 billion number is how much the 80-97% coverage bump would cost after the acquisition of T-Mobile:"Our August 8 letter to the commission is fully consistent with and confirms AT&T’s prior filings," said Claudia Jones, a spokeswoman for AT&T. "Simply put, AT&T would not be able to deliver 4G LTE to 55 million more Americans without this merger."...According to AT&T, the $3.8 billion figure refers to how much the wireless build out from 80 percent of the country to 97 percent of the country will cost with acquiring T-Mobile.
This figure is part of the $8 billion investment the company plans to invest if the transaction is approved, AT&T maintains. "This expanded commitment also means that our merger will create many thousands of well-paying jobs by unleashing billions in badly needed investment, both of which are vitally needed given our weakened economy," Jones said.
It's fairly astounding, even in the modern age of public relations, that there is absolutely nothing in that statement that's true. For one, we've noted how eliminating T-Mobile will result in an overall reduction in network investment of $10 billion, and that AT&T's job creation claims are inflated if not downright illusory, especially in the face of AT&T's continued landline job reductions. As for the $3.8 billion price tag, the letter clearly states that AT&T executives repeatedly rejected this specific number as too pricey before the merger was proposed:AT&T explained its decision in January 2011 to reject a proposal from AT&T's marketing organization to expand LTE coverage beyond the areas covered by the Plan of Record. AT&T noted that prior to January 2011, senior management had considered and rejected such proposals on numerous occasions, finding each time that there was no viable business case for the proposed expanion. When, in early January 2011, senior management again revisited the decision, it came to the same conclusion. It found that expanding coverage from AT&T's Plan of Record to 97 percent of the U.S. population would require AT&T to almost triple the land mass covered by its LTE network, from below 20 percent of the United States to approximately 55 percent and that providing LTE services to areas outside the Plan of Record would cost nearly twice as much per covered person in capital expenditures. All told, AT&T estimated that this expansion would cost approximately [Begin Confidential Information]$3.8 billion [End Confidential Information].
In the letter, AT&T states their rejection of the $3.8 billion price tag was driven by their belief that their HSPA+ network would be good enough for those remaining 17% of consumers, not because AT&T lacked the resources to make a larger shift to LTE:Given this high cost and AT&T's plan to deploy HSPA+ service to 97% of the population by the end of 2012, AT&T senior management concluded it could not justify expanding its LTE footprint beyond the Plan of Record, despite the potential marketing and competitive benefits of doing so. Specifically, AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified.
Again, AT&T's clearly saying in the letter that the $3.8 billion total was the number presented to executives before the T-Mobile merger was proposed, meaning that the total would be even less after the deal is completed. The letter claims AT&T executives rejected this $3.8 billion total due to its high cost, yet just a few weeks later were supposedly willing to spend $39 billion -- primarily to achieve the same goal. As we noted last week, this raises serious questions about whether AT&T is sending $39 billion to Germany in order to eliminate T-Mobile and place Sprint in a highly unstable competitive position in the face of AT&T/Verizon 80% market dominance.
So not only does the letter contain new data, it demolishes AT&T's claim that they couldn't achieve full LTE coverage without acquiring T-Mobile. AT&T has the resources for 97% LTE coverage -- they make nearly enough in one quarter to achieve this goal. Executives (already under fire for skimping on network investment resulting in the 2009 iPhone PR fiasco) simply didn't want to. They were, however, happily willing to shell out $39 billion to secure market dominance for the next two decades. The FCC has this data since the letter recounts a meeting between AT&T and FCC staffers, so if the agency approves the deal they'll do so knowing full well the majority of its supposed benefits are documented as false.
AT&T Blows Smoke to Cover Leaked Document Snafu - Pretends Damning Letter Offered No New Info | DSLReports.com, ISP Information
