Worst of the Week: 1+1=0


Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!

And without further ado:

It seems only a week ago that I was using these very same pages to talk about the strange world that is telecom rumors. Oh that’s right, it was.

While that diatribe centered on Apple and its significant influence on keeping that world spinning at 78 rpm speeds, this week brought along the other topic that seems to keep that globe a turnin’: Beleagured wireless carriers.

It seems that if you can find a couple of carriers that perhaps are not doing so well, the rumor mill automatically suggests that you put those two together in some sort of sorry dating game episode. (Is there really any other kind?)

This week’s blind date had T-Mobile USA attempting to pair up with MetroPCS, both carriers having recently been rebuffed by other suitors or regulators. The rumor had the nation’s No. 4 and No. 5 carrier looking to combine their struggling operations that would form either a stronger No. 4 with the strength to put a scare in larger rivals and shame smaller rivals out of business, or better yet, blow up in everyone’s face.

Recent history has shown that these sort of mergers never end well, especially for investors left trying to fund such initiatives. It seems only yesterday that Sprint thought it was a good idea to purchase Nextel for $35 billion, only to then lose most of those iDEN customers and write off that $35 billion roll of the dice.

(However, it must be said that Sprint did end up with a boatload of spectrum from that deal that could at least be cause for argument that the deal was not as absent minded as it appears from the outside. Then again, would Sprint have been better off using that $35 billion to buy spectrum subsequent government auctions then trying to run two networks? Nothing like second guessing.)

Anyways, back to the T-Mobile USA/MetroPCS conundrum.

Both of these operators have had a troubling 12 months, with MetroPCS seeming to be losing its prepaid luster, while T-Mobile USA struggled under the proposed AT&T deal only to come away with large challenges for such a small carrier. So, obviously it would make sense to have these two combine their efforts to, what, double their misery?

I mean, I can see the logic in that by bringing their operations together they can be a more solid company with stronger potential assets. But, haven’t we seen in practice that when you combine two struggling operators you end up with confusion by financial investors in just how the two will combine their operations and confusion by customers as to what the hell is happening.

Working through these challenges takes years to conquer, during which time consumers look for greater stability in the arms of other operators, which then hits operating metrics and sends investors fleeing. And looking at this potential deal more specifically, how well is a merger of two companies running separate technologies – GSM/GPRS/EDGE/HSPA+ for T-Mobile USA, CDMA/LTE for MetroPCS – going to work out. Even with T-Mobile USA’s recent announcement about rolling out LTE services that would eventually align with MetroPCS’ current LTE services, there are those whole other legacy networks being operated that will need to be tended to for some time.

I don’t suspect this will be the last rumor surrounding the joining of struggling wireless carriers as they do tend to garner attention and, what the heck, they are sort of fun to imagine. And, with so many carriers that can be lumped into the “struggling” category, there will be plenty of names to spin through this mixer.

I also suspect at some point there might even be such a deal consummated, which for someone in the news business is an event I will celebrate. But if that day comes, my guess is that the outcome will be less than the sum of its parts.

OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:

–Trade shows are a funny business. Not so much “ha ha” funny, but more “strange” funny.

In the wireless space there are a select few “tent pole” events each year, followed by a handful of mid-size events and then what seems like hundreds of smaller gatherings. Those big guys include the Consumer Electronics Show, which while still dominated by ever-growing televisions has now become entrenched with wireless, and the Mobile World Congress event that takes place in Europe.

The mid-sized events include various wireless shows in Asia, some in Europe and Latin America and domestically the “spring” CTIA event, which is where many were found this past week. For those of us with a bit of history in the domestic wireless space, the spring CTIA event has traditionally been the “big” show each year, a designation that has sharply shrunk in recent years.

It’s not that the event is still not important, but instead that it seems vendors and attendees seem to spend much of their time at the event wondering why they are spending time at the event. I can’t tell you how many people I met up with at this week’s event that questioned why the event was still on the schedule, and why CTIA does not shift its focus to a single event timed to its annual “fall” event.

Of course, everyone acknowledges that the reason this event remains on the calendar is because it still generates money, and as we all know, that is what makes the world go ‘round. I am quite aware that I am in no position to tell anyone how to run their business. But, with so many people that I acknowledge are way smarter than me saying that the current plans need to be fixed, well then I defer to that intellectual superiority.

Two CTIA’s result in just that: half interest for both events. But, a single, all-powerful CTIA event. Now we are talking.

–One side note from this week’s CTIA show: Normal device power players like Samsung, Motorola and Nokia were notably absent from the show floor replaced with the likes of Plum, Konka, Haier and Sendtel as well as what seemed like hundreds of accessory companies.













Not that these new players don’t have significance, but when established companies start bypassing your event that could be a hint that your event might need a re-fresh.

–While on the topic of trade shows, I am still confused by the “eye candy” that remains deployed across show floors in what I can only guess are attempts to lure the predominately male show goers into booths that they would normally not have any interest in visiting. It’s not that I mind the visual stimulation, it’s just that I am not sure how to interact with it.

You obviously can’t expect any of these “booth employees” to help me with device specifications or clarify pricing strategies, yet you don’t want to seem like a jerk who thinks these people can’t discuss device specifications or clarify pricing strategies. For me, the best move is to just keep moving. Nothing to see here.

–“Well I’m as cool as a cucumber in a bowl of hot sauce/You’ve got the rhyme and reason but no cause/Well if you’re hot to trot you think you’re slicker than grease/I’ve got news for you crews you’ll be sucking like a leech”

I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.

Bored? Why not follow me on Twitter?

About Author

Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”