Customers need help -- and Softbank is everyone's white knight
There's no doubt that cellular users in the United States need help. AT&T's service in many metro areas, including San Francisco and New York, is poor, to say the least. Verizon's network, while not up to Asian standards, is better, though it has its own coverage and speed challenges. Plus, the No. 1 U.S. carrier is also the most expensive, after boosting some prices with its shared-data plan, and consistently plays hardball with customers.
Both carriers have made unlimited data plans a thing of the past, and users are locked into long-term contracts that make switching providers an expensive proposition.
Consumer advocates favor this proposal -- with a few reservations. That's a real switch from how they usually view such acquisitions, as we saw in the strong reaction against the proposed AT&T buyout of T-Mobile. "Softbank's investment in Sprint could be a net positive for consumers, but only if Sprint deepens its commitment to its wholesaling and competitive pricing strategies," says Matt Wood, policy director of Free Press, a nonpartisan advocacy group.
As a reality check, I talked to two sources at the California Public Utilities Commission, regulators who opposed the AT&T/T-Mobile deal. Neither could speak on the record, but both were quite positive about the acquisition from a consumer point of view.
Said one: "I think the Sprint/Softbank proposed deal has the potential to be better for consumers in the long run. I know that the common wisdom in the United States is that Softbank is making a bad decision because Sprint is struggling. But with some new backing and perhaps new ideas, Sprint might be the better for the bargain. And I agree that the smaller of the big four wireless companies need to bulk up to compete with the Verizon/AT&T duopoly."
The deal needs to be approved by regulators in Washington, D.C., but it's hard to imagine there will be significant opposition.
The T-Mobile/Metro PCS merger would be good for you, too
Reports in Japan indicate that Softbank is also interested in acquiring Metro PCS, a move that seems difficult to pull off given the amount of debt the Japanese company is already taking on to purchase Sprint and pay for earlier acquisitions.
In the meantime, Metro PCS shareholders may block the purchase of T-Mobile, which would be a shame. Deutsche Telekom is desperate to unload T-Mobile and continues to withhold the resources needed by the company to improve its service, as it has for more than a decade. If the T-Mobile/Metro PCS deal goes through, we'd have two better low-cost carriers -- Sprint and T-Mobile/Metro PCS -- with wider coverage that could give us all serious alternatives to AT&T and Verizon.
As California Gov. Jerry Brown used to say, "less is more." If the T-Mobile/Metro PCS deal closes, there will be one fewer carrier in the United States, but we'd get more service and more choice.
This article, "No kidding: The Sprint buyout is actually good for you," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.