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  • Should You Worry About AT&T Gobbling Up Cricket Wireless?

    I just saw this article from Washington Post and I thought it might be good to add here. I know there has been some mixed feelings about AT&T acquiring Cricket.

    SOURCE: Washington Post

    AT&T Wireless has announced plans to acquire Leap Wireless, best known for its Cricket brand of phones for low-end consumers. The move has rekindled a long-running debate about whether the consolidation of the wireless market is good for consumers.

    That process has been under way for at least a decade. The company we now call AT&T was created by the merger of two earlier wireless carriers in 2004. Another merger produced todayís Sprint in 2005. Verizon Wireless has acquired a string of smaller wireless carriers in recent years, including Alltel in 2008.

    But the consolidation process hit a major roadblock in 2011 when the Obama administration blocked AT&Tís proposed acquisition of T-Mobile, the nationís fourth-largest wireless carrier. Instead, T-Mobile merged with MetroPCS, one of its smaller rivals.

    Even after that merger, T-Mobile and Sprint remain dramatically smaller than Verizon and AT&T, the market leaders. And critics say allowing AT&T to gobble up Leap will further entrench AT&Tís dominance.

    One reason AT&T is likely interested in acquiring Leap is the latterís spectrum holdings. And John Bergmayer, an attorney at Public Knowledge, argues that the market is already ďvery top-heavy,Ē with AT&T and Verizon holding a disproportionate share of the airwaves. Bergmayer argues that spectrum gap insulates it from competition from smaller rivals. And he warns that allowing AT&T to acquire Leap will skew the market even further, leading to fewer consumer choices and higher prices.

    But Fred Campbell, a former FCC staffer and an analyst at the Competitive Enterprise Institute, disagrees. He contends that Leapís business strategy, which focuses on providing connectivity to urban customers, has caused Leap to neglect rural markets and under-use its spectrum holdings there. Campbell contends that transferring Leapís spectrum to AT&T will allow it to be used more efficiently, improving the quality of service for customers of both companies.

    Campbell also notes that Leap is hobbled by a high debt burden, which will make it difficult to keep its network on the cutting edge. He argues that AT&Tís deep pockets and broad customer base will allow it to use Leapís spectrum and other assets more efficiently.

    Bergmayer doesnít deny that the merger could allow AT&T to use LEAPís spectrum more efficiently. But he warns that ďthose efficiencies may be offset by AT&T facing less downward pricing to be passed on to consumers.Ē In his view, Leapís presence at the low end of the cellular market forces the larger firms to keep prices down and service quality up. Every time a firm exits the market, those competitive pressures get reduced.

    AT&T also may be interested in another asset that has nothing to do with spectrum: the Cricket brand. Low-end and pre-paid cellular plans are one of the fastest-growing segments of the market. Acquiring the Cricket brand could make it easier for AT&T to sell its services to low-end consumers. That could mean better service for those customers. But it could also just mean higher prices.

    The FCC and the Department of Justice will both need to sign off on the proposed merger before it can go forward. Whatever they decide, the debate over wireless consolidation isnít going to end any time soon.

    This article was originally published in forum thread: Should You Worry About AT&T Gobbling Up Cricket Wireless? started by knewsom32 View original post
    Comments 12 Comments
    1. reggjoo's Avatar
      reggjoo -
      All you gotta look at is at+t's strategy . They are willing to have a plan, not unlike TMobile's plan , but less flexible, and in the end will cost you more. If anybody doesn't think that they won't screw cricket customers, I've got a plot of land in the ocean to sell!
    1. mkakemon's Avatar
      mkakemon -
      Yea, I kinda figured prices will go up, no question about it.
    1. swattz101's Avatar
      swattz101 -
      The only good I can see is hopefully LTE will be pushed out quicker to more areas. Unfortunately, most of that is probably on hold until the merger goes through.

      And maybe quicker updates to phone OS software....who am I kidding?
    1. LaCarlis23's Avatar
      LaCarlis23 -
      Im really not looking forward to this but who knows.
    1. Stephen Proffitt's Avatar
      Stephen Proffitt -
      Ok so here's a bit of info to add to this....

      I now work for Walmart in the electronics department. We get reps from all carriers, manufacturers, etc that come through our store. Today the AT&T rep came by so I popped a few questions for him.

      Me: Do you know anything about AT&T buying out Cricket?
      Him: Cricket you mean...

      Me: Leap Wireless
      Him: Ah yeah a little bit.

      Me: How's this going to work? Is AT&T buying Cricket for the spectrum only?
      Him: It's all about the spectrum. In cities like New York, the networks are under heavy load. When we finalize the deal, that load will be more moderate.

      Me: Ah I got you. So another question for you. Is AT&T planning to shut down the CDMA segment of Cricket/Leap or run both simultaneously?
      Him: What do you mean?

      Me: Well a couple years ago T-Mobile bought MetroPCS and said that by 2015 they were shutting down the CDMA and making customers buy a new GSM phone or just cancel the service. Is that AT&T's plan?
      Him: Well we're all about GSM so I would say yes. It's still too soon to tell, but we'll probably know more in a year or so.

      (At this time I was interrupted by a manager so I had to stop the interview...)

      There you have it... This isn't set in stone yet, but this is what we really have to look forward to.
    1. Android Titan's Avatar
      Android Titan -
      So in other words next for you buy get one that's like the galaxy and HTC that talk sims

      Sent from my SCH-R530C using Tapatalk 2
    1. monty's Avatar
      monty -
      ATT has no need for the CDMA network at all, and the coastal cities are where ATT hurts the most in spectrum. The long term goal for every carrier is to go VoLTE(Voice over LTE) which is a lot of bandwidth, and they need a strategy to offer both as they migrate. This migration means they need more on LTE than currently used as RF management is slow and tedious and a pain in its own right. With that said, As someone who helped build a market for cricket using the AWS band on a coast that only launched in 2009, it saddens me that it will be shut down so soon, but that's buisness I guess. I just worry for my coworkers and they need to pay bills.
    1. wiseoldman's Avatar
      wiseoldman -
      Quote Originally Posted by Stephen Proffitt View Post
      There you have it... This isn't set in stone yet, but this is what we really have to look forward to.
      I would agree. So ATT bought the customer base and spectrum. If they have other plans for the CDMA spectrum then they will bring the customers over to GSM. Like with slick marketing BS saying "we are offering new and improved service that will help you become the most amazing person on the planet. Just bring your old crappy CDMA phone in and trade for a new shiny GSM phone ($50 discount) with the same awesome plan benefits". Then once ATTBorg have assimilated you they start changing your plan little by little, squeezing out all the money they can with fees, etc...

      AT&T has acquired spectrum through more than 40 spectrum deals this year (some pending regulatory review) and has plans to buy additional wireless spectrum to support its 4G LTE network. Much of the additional spectrum came from an innovative solution in which AT&T gained FCC approval to use WCS spectrum for mobile broadband. Between what the company already owns and transactions pending regulatory approval, AT&T expects to have about 118Mhz of spectrum nationwide. The company will continue to advocate with the FCC for release of additional spectrum for the industry's long-term needs.

      ---------- Post added at 09:45 PM ---------- Previous post was at 09:40 PM ----------

      And one other thing, if many cricket customers are previous ATT customers that have unpaid/bad accounts, how will that go down with the ATT delinquent account police?

    1. wthigon's Avatar
      wthigon -
      I'm low-end consumer? In other words a poor person? Only poor people or people with no credit get cricket? Damn poor people and their iphone 5 and galaxy s4....
    1. Stephen Proffitt's Avatar
      Stephen Proffitt -
      It's not about poor really. I could have went with one of the big 4 but I chose Cricket because of the freedom. However the majority of Cricket customers are only here for value phones

      Sent from my Cricket S4
    1. cjreyes666's Avatar
      cjreyes666 -
      I switched to Cricket do to phones and pricing of plans. But is a pain to buy a brand new phone over 5 or 6 hundred dollars. I don't think att be shutting down the CDMA network just like that. Is going to take some time, probably in the next year or two. And again is going to be in different markets. I really hope that att keeps the cricket brand just migrate cricket to GSM, but that is really a wet dream. If att does shut down cricket for what ever reason I hope it happens in the very far future, but if it happens with in the next year I'll be looking around and t-mobile 30 plan looks good.
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