If no AT&T deal, T-Mobile has tasks ahead

The AT&T-T-Mobile merger isn't completely dead yet, but T-Mobile has a lot to accomplish if it's left at the altar by AT&T.

As we told you earlier this week, the controversial tale of the AT&T-T-Mobile merger may be coming to an end.

Editor's note: On Monday, December 19, AT&T announced that it was abandoning its T-Mobile bid completely.

I say "may" because the deal could still (and probably will) happen, but with both the Federal Communications Commission and the U.S. Department of Justice opposing the $39 billion acquisition (not to mention AT&T withdrawing its application ), the carrier will have to heavily revise the terms to get it approved. And now, with AT&T and the DOJ asking a federal judge to delay a pending antitrust case against the merger, it will have an opportunity to do just that.

Though Deutsche Telekom isn't pleased that its child may be left at the altar, Sprint execs , many wireless customers (T-Mobile and not), and your average tech journalist (ahem) see the recent developments as good news. Indeed, the prospect of one fewer carrier was a tough pill to swallow and outside of a few politicians , labor unions , and special interest groups , I struggled to find people who were aching for the marriage to happen.

So where does T-Mobile go from here? As CNET's Roger Cheng wrote last month , T-Mobile and its parent have quite a few options, but I'm going to take a dimmer view in this column. Let's say for a moment that the deal does come crashing down and AT&T walks away while leaving Deutsche Telekom a $3 billion breakup fee .

Also, let's say for a moment that no other suitors come knocking on T-Mobile's door and Deutsche Telekom decides to double down on its United States effort or revisit the idea of a T-Mobile IPO . In either case, I have a few suggestions for my magenta friends. And I'd love to hear yours in the comments.

Coverage
T-Mobile, I know you don't want to hear this, but I have to lead with this point. A cell phone carrier is only as good as its coverage, and in that respect you have some work to do. On the upside, I don't have much of a problem in most urban areas. I can get service at home, at the office, and even in the occasional underground station. Bravo.

Outside of town, however, it's a different story. Take, for example, the Russian River area in California's Sonoma County where I usually spend a couple of weekends every summer. Your carrier rivals can be spotty there, too, but your coverage is pretty much limited to the Safeway parking lot in Guerneville. Getting cellular service only when I stop is for groceries is a bit inconvenient. So, yeah, you need to take it up a few notches in smaller towns and rural areas.

On the other hand, even more-populous locales can be a problem. Every couple of years I make it to Green Bay, Wis., to see family. As soon as I land I'm using a roaming partner so I lose direct access to my voice mail (instead I get my outgoing message and have to enter my password). No, it's not a huge inconvenience, but it's irritating anyway. And as any Packers fan can tell you, Green Bay isn't a place to be slighted.

Of course, the answer here (and to my next point) is spectrum. You need more of it, so why not do as Roger suggested and take that cold $3 billion in cash and go shopping for more spectrum (if the federal government ever releases it) or acquire a smaller regional carrier, Dish Network , or a cable operator?

A path to 4G
Now it's time for a mixed message. By all means you deserve a lot of credit for aggressively rolling out your HSPA+ network. Though its not "officially" a 4G technology, it delivers 4G-like speeds and you beat your rivals to the punch by rolling it out quickly to a lot of people. So, as I said, good show.

Yet, the problem is that HSPA+ can't last you forever . When you first turned on the network, it didn't really matter which technology you were using. As long as customers found great speeds in a lot of places, they were happy. But now that Verizon Wireless has stormed into the marketplace with an extensive and very fast LTE network , you're no longer leading the pack. What's more, as AT&T expands its LTE and Sprint makes the switch from WiMax, customers will notice that you're the only major carrier without it. To remain competitive, you'll have to get on that train.

Note to T-Mobile: You need this. Josh Miller/CNET

Get the iPhone
Honestly, it pains me to have to say this and I realize that I'll incur the wrath of many of fandroids. The truth is that I've always respected you for your gutsy approach to your handset lineup. You played a big part in promoting Android in the United States, and you recognized that HTC was a solid brand early on. That aggressive spirit delivered a lot of great phones that have scored well in CNET's reviews.

Sadly, though, Android can no longer be your sole calling card. When only AT&T sold the iPhone, you could get away with not having it because neither did anyone else. And during that time, you successfully set yourself apart by offering great Android alternatives. But now that Verizon, Sprint, and even C Spire have picked up Apple's handset, you're in the minority. When you're talking about one of the country's most popular phones, that's not a good place to be.

That's why you have to bite the bullet and dance with Apple . I know that Apple plays hardball and demands a bit more than your other carrier partners, but you need to start expanding your subscriber base . The iPhone will help.

Be true to yourself
Lastly, it's important that while making changes you don't lose yourself. T-Mobile always has succeeded at price and customer service, so you'll need to keep both games going. With price, you've been able to beat your rivals by offering cheaper contracts for about the same set of services. That's great, but aggressive prepaid carriers are fighting hard for the cost-conscious consumers. I'm hoping that you can win back high-value customers while keeping your edge on price.

On a similar note, you have to keep that customer service crown that you've worked for for so long. You haven't been at the top of every study from Consumer Reports and J.D. Power and Associates--and even in those cases it's been a close call--but the public perception is there. Any change in that perception won't be good for your bottom line. Remember, that's one reason why the merger terrified so many people.

I like you, T-Mobile, I really do, which is why I'd love for you to stick around in one way or another. My reality check tells me that the merger will happen in some form, but if it doesn't, you know what to do.

 

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