Dish and even Google linked to TMo purchase
Deutsche Telekom's US arm in fighting spirit at CES, as rumors of new bids or wholesale deals rumble in the background
Published: 11 January, 2012
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Since AT&T's bid to acquire T-Mobile USA collapsed, it has been widely assumed that no other buyers would be forthcoming and parent Deutsche Telekom would have to find ways to make its fading US unit viable. At this week's Consumer Electronics Show, TMo was addressing one of its great disadvantages, its lack of an iPhone, while behind the scenes, negotiations were reportedly taking place for network or spectrum sharing deals with partners such as Sprint or Leap. However, one analyst has gone a step further and claimed that TMo has, in fact, found new potential acquirers, in the shape of Dish Network and even Google.
SNL Kagan reports that both firms have actually submitted bids to buy TMo USA. There is some sense to the Dish talk. The satellite-TV company last year acquired significant mobile satellite holdings, and is pressurizing the FCC to allow it to run LTE terrestrial services in that band, a la LightSquared (but without the proximity to GPS). Dish has openly said it could be a fallback option for TMo, as a wholesale or spectrum partner - but a full merger is not out of the question, since the satellite player does not have sufficient spectrum on its own to support a full-scale 4G wholesale network of the kind it has outlined. Owning TMo would give it further licences as well as an anchor tenant and a consumer brand which could be harnessed for its own quad play ambitions.
Google is a less likely outcome. There have been numerous rumors over the years about the search giant's ambitions to become a carrier in its own right, in order to control the mobile user experience and advance its agenda of extending web access (and its own services) to everyone, while supporting hundreds of service providers on a wholesale network. All these remain important elements of the Google strategy, but will be best achieved by working with the operators and ensuring that they cannot avoid supporting the Google experience, applications and business model on their networks. The web giant is making strong progress in this respect already, and as usage shifts to the cloud the need to control the actual pipes will become even less obvious. Although it has taken stakes in carriers, like Clearwire, before, built its own Wi-Fi networks, and even bid for spectrum, all of these have been moves to put pressure on conventional operators or to test new technologies - not to turn into a fully fledged cellco. Its much-touted purchase of fiber capacity is to support its cloud activities, not a consumer quad play.
Whether TMo does find a new parent or just a 4G partner, it needs to reach out to the iPhone base which has proved so important to AT&T and Verizon. The cellco's CTO, Neville Ray, told the CES audience that the technical obstacle in the way of a TMo iPhone will soon be overcome, even as his CEO, Philipp Humm, told a press conference at the show that the lack of the Apple device has inhibited the ability to win or retain postpaid subscribers. The main problem, according to Ray, is that TMo works in a non-standard 3G band, but he claims the next chipset Apple will use will be able to support its particular AWS frequency. He told CNet: "The challenge that existed in the past will go away", though he admitted the technical capability would not inevitably mean Apple will choose to support the band. And of course, the next iPhone will presumably support LTE, which TMo will not be able to run until at least 2013 unless it forms a partnership, so it will still be trailing its rivals in iDevice terms.
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