T-Mobile, Sprint merger evaluation by FCC & DoJ could take at least 12 months if deal goes official

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In an exclusive scoop over at Bloomberg it’s been revealed that Masayoshi Son is ready to play the long game when it comes to SoftBank/Sprint’s purchase of T-Mobile US from Deutsche Telekom. The site’s sources claim that the wealthy business man is asking banks to commit financing for a “longer-than-usual amount of time.”

In response, the financial institutions are wanting higher fees, since they are expecting the deal to take a long time to be approved by the U.S. regulators. Deutsche Telekom, the banks and SoftBank all expect the approval process by the FCC and Department of Justice to take at least one year after the the deal is announced officially. If/when the announcement is made by T-Mobile, Sprint or SoftBank, the banks have pruportedly given the companies 18 months to seal the deal. If that time period goes by without the seal of approval from the FCC or DoJ, the banks will pull the funding.

In theory 18 months is enough time to go from announcement to regulatory approval. But you never know what issues or negotiations might need to take place in that time. There’s always a chance of unexpected delay. And – of course – if the deal is blocked, or it doesn’t go through, T-Mo US stands to received more than $1 billion in compensation.

We heard already this week that the SoftBank/Sprint and T-Mobile are in the latter stages of ironing out some of the final points in the merger and buyout agreement.  So if an announcement is going to be made, I can’t imagine the companies will keep us waiting that much longer. I’d personally expect some for of official statement or press release before the year is out.

Are you for or against this deal? Can T-Mobile remain the “Un-carrier” if it merges with Sprint?

Source: Bloomberg

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  • Adrayven

    Jumping ship.. I’ll be gone..

    • Eric Hare

      Yup, the moment this is announced, I’m gone too – Unless Legere stays at the helm, and the T-Mobile branding remains.

      • Jay J. Blanco

        What if the deal is rejected. You would have switched for nothing

        • Willie D

          Switching based on principal alone.

    • Jamison Shaw

      No you won’t…where are you going to go? Verizon? Att? Yeh, give the duopoly exactly what they want.

  • Adrayven

    Uncarrier will be done.. no way they will keep current pricing. Unlimited plans.. Customer pain points will return.. I foresee a mass exodus that will easily rival what happened with AT&T..

    Sprint/SoftBank will bring the noose and drag T-mobile down with it. Some companies should just let fade and die.. Sprints one of them.. We can pick the bones of Spectrum after..

    • SouthernBlackNerd

      I am not for this merger( I think Sprint and TMUS are better off alone and the divestment of spectrum would only help ATT and Vz, while not fixing S/T’s coverage problem), but why would they do away with the current pricing or unlimited plans? Sprint was the only one to actually keep their unlimited plans. Also Tmobiles current pricing is more expensive(when you include EIP) than Sprint’s unlimited my way plans. Legere is also going to be the CEO of the combined company, so I doubt most of the uncarrier stuff will go away. And I have heard that if this deal does happen, that SB and DT will sign a roaming agreement to make it free for their customers( including T and S customers) to travel to their service areas and get free service, but that last part was just a rumor.

  • sushimane

    12 months that’s to long with att and tmobile it took the govern bodies i think 180 day of process and then it got rejected at the end. this is going affect them from the auction of the 600mhz for sure even if the auction was said to be in the middle of 2015. I dont know what too think i say if the deal is to complex the govern bodies should just reject it if too complex. if they actually annouced it and say that john would be the ceo of the new co maybe just the fact he may let tmobile customers keep our plans so that mean we get to keep our unlimited data plan lol. but on the serious note i dont like it.

  • kev2684

    i feel like if this deal is approved, upgrades on both network will stop for a year while this is going on and they’ll both bleed customers in the process leaving the twin bells swooping customers from both of them until the duopoly is fully realized. i, for one, will probably go with goPhone or Cricket if this actually happens.

    • Jeremiah McCurry

      I don’t think either will stop upgrading during the next year. Whether or not a full merger goes through, Son has also stated that LTE network sharing would be a possibility.

      • johnny7

        Be serious. Softbank is acquiring billions in debt to buy tmo. They weren’t spending squat on Sprints network before this. You think it well get better. Yeah.

        • Jeremiah McCurry

          If you really believe that then you are too uninformed to even comment on the topic.

        • johnny7

          You truly are stupid. Name One merger in Any industry where the acquiring company took on billions in debt that resulted in anything but massive layoffs and and degraded service.

        • Jeremiah McCurry

          I wasn’t referencing the debt load of a combined company. You said Softbank and Sprint have spent nothing on their network recently. They’ve spent billions in the last two years.

        • johnny7

          No I didn’t say they haven’t spent Anything. I said they haven’t spent Squat!! They have spent about 600 million in actual LTE upgrades, not Billions. And they had to borrow that. The truth is that less than 18% of Sprints pathetic network has LTE. Clearer now??

        • Jeremiah McCurry

          Not clear at all. It’s hard for me to understand people who are talking out of their arse. 18%? It is now well over 70% LTE.

          Sprint/Softbank have been spending $8 billion a year to run, upgrade, and expand the network.

        • johnny7

          Sorry Dan, say hello to Mrs. Hesse for me.

        • johnny7

          Sprint had less than 260 million in cash and was nearing bankruptcy when Softbank acquired Sprint with borrowed money. Sprint wouldn’t know 8 billion from the took fairy. So when you go to work today selling phones at the local Sprint retail store tell them to stop bs’ing you. In actual numbers Sprints LTE covers 18% of their network(where LTE service is available inside). If you want to count outside LTE reception the actual number is 21% .

        • Jeremiah McCurry

          Your dumbest made-up fact yet. Over 70% of towers are broadcasting 1900 LTE. If you’re only counting 800 MHZ spectrum then T-Mobile has 0% coverage since they aren’t deployed on any 700 to 800 spectrum.

          Lord knows how you invented that 21% number.

        • UMA_Fan

          I also can’t remember any other merger in history that doubled each other’s customer base as this would do now. You would need roughly double the sales and customer service staff to service all those new customers.

        • johnny7

          Are you joking???? No you will wait 90 minutes for customer service to answer and then get a clueless person in the Philippines that barely speaks english making 80 cents an hour that doesn’t have a clue what in the he’ll you’re talking about. And doesn’t care.

        • Jason Schmitz

          Highly unlikely given that one of the first things Hesse did when he took over was move the customer service call centers back to the United States.

        • johnny7

          You’re nuts. 55% of Sprint customer service reps (in number) are in the Philippines and India.

        • DirkDigg1er

          You ask a open ended question, and critique responses as if you asked a specific question. You are truly pathetic. They often say, a man that engages in flawed arguments is in theory a bit@h, and you sir fit that mold. Have a nice day!

        • johnny7

          Verizon didn’t purchase Verizon Wireless. Verizon Wireless bought Vodafone’s share of Verizon Wireless to effectively eliminate that partnership. When you are profitable and have Real cash you can do that. There was no merging of different, competing companies. Thats a ridiculous comparison.

        • johnny7

          Hey Dork/Dirk. Try to learn to read. I said “where the acquiring company took on billions in debt”. Tmobile did a stock swap with Metro pcs stockholders that created very little actual new debt. Cingular, which was wholly owned by SBC also did a stock swap and also had 40 billion in cash at that time.(2006 not 2004 as you state). SBC didn’t borrow a Dime because they were a Profitable company. And So l Softbank bought Vodafone Japan with all borrowed money. Softbank eliminated 33% of the workforce in 18 months, raised prices and the Only reason they didn’t lose massive market share was they were the Exclusive iPhone carrier in Japan. Dumbass.

        • cwa1979

          Uninformed???? Maybe I can help you. 1.) Neither Sprint nor Tmobile have turned a profit in Years. 2.) The Billions that Softbank is Borrowing is not a gift. The debt will be serviced before any other spending so as not to default. Whatever is left ( little to none) Will be used to operate this company.

        • Jeremiah McCurry

          “They weren’t spending squat on Sprints network before this”

          That is the comment I replied to. It is a complete fabrication.

    • cwa1979

      And?? Gophone and Cricket are both AT&T. Metro, Virgin and Boost will be T-Sprint. Not great choices.

      • kev2684

        and?? if this happens the thing son wants (to eliminate duopoly) will fail and the consumers end up paying the price.

        • cwa1979

          You are Absolutely Correct. Except” what Son wants”. He doesn’t give a rat’s ass about a duopoly. But consumers will Absolutely get screwed.

    • Willie D

      I’m already a Cricket subscriber using one of my TMobile devices unlocked after I finished my EIP last month. I made it very clear to TMobile that I disliked Sprint (as I left them for TMo) and their customer service, their network and their shoddy high spectrum frequency LTE for Spark, mismanagement of MVNO spectrum allocation, preferential treatment of prepaid over postpaid long term contract holders, lack of simultaneous voice and data, and lack of viable upgrade options, none of this mentioning roaming internationally, per MB overages, or hidden fees and surcharges… That if TMobile was inclined to merge with Sprint, then I was inclined to unlock my devices and exercise my right to switch carriers and test them before any announcement is made. Gotta say, while Cricket is slower than TMobile, it is more consistent, has better indoor LTE coverage and does not have those funky LTE dropouts that people are mentioning, and no overages just throttling. So yeah, all in all, a perfect replacement so far. Sorry TMo but I hate Sprint enough that even if they use John Legere and TMo name, its still “Sprint” on the management and ownership and will take years and billions more dollars to fix a network, leaving TMo customers to suffer like Sprint customers have for a decade.. Screw that.

      • UMA_Fan

        This is stupid. Softbank has only owned Sprint for a little over a year and are not responsible for the Sprint as it exists today. Softbank taking control of T-Mobile US and harvesting Sprint to enhance everything T-Mobile US is doing is NOT Sprint management taking over T-Mobile US.

        • Justin747

          Softbank is a company who couldn’t see what terrible shape Sprint was in before making a huge investment.

          Softbank taking over T-Mobile is just as bad as Sprint taking over. I see virtually no difference. Both companies have terrible leadership and make terrible decisions.

      • ChitChatCat

        You mean after you made all of that clear to a retail rep while signing up (poor rep!), the executives at T-Mobile’s parent company went ahead and talked about corporate structure changes against your wishes?!?! FOR SHAME!

  • Eric W

    I’ll leave as soon as they mess with my plan.

  • Chriz

    Oh cool, so another year of rumor baiting. On the bright side, we have another year of decent internet, and by then, T-mobile should have the coverage to stay top-dog in the battle. Also by then, it would be in both companies interest to keep T-mo as the governing body and Legere as the lead, because if this happens, he will be the only one keeping the company afloat. I hope Son, as enthusiastic as he is, doesn’t try to interfere…

  • Jay J. Blanco

    Cant do anything but wait until August

  • cwa1979

    It’s not so bad. Look what a Great job Sprint did when they bought Nextel. It only took 4 years until every pissed off Nextel customer left that joke of a company!

    • Jay J. Blanco

      When Sprint purchased Nextel theyre market share was 22% Sprint was #1 in size. Tmobile was 2.9%. Now ten years later Sprint has a 15% market share and tmobile has 12% something is wrong here. Sprint sucks. They went from #1 to #3. Now slipping to #4 I dont think this deal will go through do to the fact Sprint cant compete

      • Terry

        Jay, In an earlier post you said “When Sprint purchased Nextel theyre market share was 22% Sprint was #1 in size. Tmobile was 2.9%. Now ten years later Sprint has a 15% market share and tmobile has 12% something is wrong here. Sprint sucks. They went from #1 to #3. Now slipping to #4 I dont think this deal will go through do to the fact Sprint cant compete” Now in this post you say they were #2. Can you tell us where you are getting your facts?

      • DirkDigg1er

        In 2004, Cingular purchased ATT creating the largest wireless company with 46m customers eclipsing Verizon’s 42m customers. Sprint purchased Nextel and gained 40m and T-Mobile after Cingular network split had 16-20m customers.

        Today, Verizon has 122m, ATT 116m, Sprint 53m, and T-Mobile 49m customers.

        • Jay J. Blanco

          But my point was Sprint has lost almost all of Nextel Market share they gained. This is why the merger won’t work with tmobile

  • Jeremiah McCurry

    That Bloomberg article also confirms that, with or without a merger, T-Mobile and Sprint are preparing a joint bid for the 600MHZ auction. bloomberg.com/news/2014-07-14/sprint-said-to-plan-for-lengthy-review-of-t-mobile-deal.html

  • Morning Wood

    Remember, all the upgrades that tmobile is doing will come to a halt. It did when at&t was wanting them

    • philyew

      It would be a serious mistake on TM’s part to abandon their current competitive improvement plans during the course of any takeover review.

      The very essence of the scrutiny will be how the takeover negatively impacts competition. How will it look for TM to cease to act competitively before the takeover even takes place? It would be the kiss of death for the deal.

      The whole demeanor of the company is totally different from how it was prior to the attempted takeover by AT&T. Back then, TM was in a total mess with no organic growth potential and, crucially, no route to LTE. Now it is a company with drive, attitude and purpose, and has become the tail wagging the dog.

      To retreat from that position for a year or so, when the main argument in favor of the deal is that the resulting, merged entity would be “UnCarrier on steroids” would reveal the reality of what the merged company will actually represent. They simply can’t afford for that to happen.

  • Nathaniel Ily Jacob-Joshua Hud

    As long as the sprint name is gone.

  • rick33

    The facts are that a combined Tmo Sprint will carry 75 Billion Dollars in combined Debt!!! Network upgrades??? Right!!!!! Horrible customer service. Minimal network upgrades if any. Huge layoffs. And forget the name tmobile. And don’t forget Higher Prices.

    • Ashton3002

      Last time I checked they were going to keep T-mobile name and brand and sprint would be the one losing its name.

      • yaz67

        Better check again.

        • Ashton3002

          Or you better check again boo.

        • yaz67

          Stop reading MAD magazine.

        • KlausWillSeeYouNow

          And start reading Success Magazine! It’s quite interesting.

    • Ffssmdh

      All those unnecessary exclamation points and capital letters sure do an excellent job of making your point.

      • rick33

        Thanks. As do the absurd amount of useless consonants that your”name” contains.Oooops!!!!!!!

  • steve

    If Son I’d smart he will keep the T-Mobile brand and Legere and let him keep doing what he is doing because it clearly works. If you look at Softbanks history in Japan he brought prices down by taking on the Japan big boys. I think Legere has given a few hints especially when he said Sprint is just a pile of spectrum. T-Mobile under Legere has show they can upgrade a network faster than anyone has done previously and they are way ahead of planned with the Metro aquisition so they know how to merge. I think you will see the T-Mobile network side continue to expand and the Sprint side slow just like when AT&T was buying T-Mobile since AT&T was really just buying spectrum and customers, in this case I believe T-Mobile is the surviving entity.

    • ari44

      Your crazy. The fact is that in Japan Son bought Vodafone Japan with money all borrowed and he became” Japan’s Big Boys”. He was the Exclusive iPhone carrier and was never cheaper than any competitor.

    • maximus1901

      And prices will go up.

  • Jay J. Blanco

    When Sprint purchased Nextel theyre market share was 22% Sprint was #1 in size. Tmobile was 2.9%. Now ten years later Sprint has a 15% market share and tmobile has 12% something is wrong here. Sprint sucks. They went from #1 to #3. Now slipping to #4 I dont think this deal will go through do to the fact Sprint cant compete

    • maximus1901

      That’s why fcc doj will block it? Because sprint can’t compete? That’s actually a reason in favor of approval.

  • Deadeye37

    I’d be for this if
    A) Legere stays in charge is allowed to do what he’s been doing (no hands tied)
    B) If the combined company can bring to bear sprints unused spectrum quickly
    C) If they can dismantle Sprint’s CDMA network and repurpose the spectrum to fix with T-mobile’s network
    D) Fix Sprint’s backhaul and/or improve T-mo’s backhaul to compensate for increased traffic
    E) Step up customer service instead of getting defensive.

    All this will take a lot of money. I don’t know if Softbank can swing this with that huge debt load they’d be carrying.

    • Paul

      That’s a reasonable list, and I agree with a lot of it.

    • Aurizen

      John Legere can do it he got a company out of bankruptcy, he can deal with a deficit of the new company.

    • Justin747

      A) He will be limited due to increased debt from combined companies.
      B), C), and D) would all take YEARS to see even really any significant progress.
      E) Expect growing pains from layoffs, store closures, and employees learning new systems, policies, plans, etc. I worked thru the Sprint/Nextel debacle. Clusterf&*^ is an understatement…

      This merger is a disaster. I don’t think anybody is looking at it fully. A combined Sprint/T-Mobile/SoftBank could only compete with Verizon/AT&T of TODAY. VZ/ATT aren’t just gonna sit around and let T/S/SB play catch up. VZ/ATT will make tons of network improvements in the years it takes to even get the combined company on the same page.

      I still don’t see any benefit to anybody but Sprint customers who are stuck in contract or people who dislike AT&T and/or Verizon.

  • Paul

    Without the details of the merger we cannot know if this is a good or bad move. I’m not for this, but I can see some reasonable points that would bring me a bit closer to the idea of this happening.

    I know a LOT of people will start to freaking out and talk about jumping ship.
    RELAX!! This hasn’t happened yet. This hasn’t been officially announced yet. They are still talking details. This can suddenly stop.
    Hang tight and let’s see what’s going on.

  • Coleman

    UnCarrier 7.0 anyone? Legere has already said they’ve been working on this one a long time!

    • maximus1901

      Yeah higher prices cause you won’t have a choice with only vzw and att left ;)

    • TechHog

      There will be no Uncarrier 7.0.

  • John

    If sprint t mobile deal goes thru, i hope att sues the hell out of the fcc and doj

    • CalicoKJ

      There’s a huge difference between #1 and #4 merging and creating a GSM monopoly and #3 and #4 merging, although it will create a CDMA monopoly eventually. Not that I’m a fan AT ALL, but you’re comparing apples to oranges and getting pears.

      • vrm

        trying the spin out of the sprint boardroom, eh ? Which bullet point is it in the spin pamphlet ?

  • Chris chou

    I’m hoping the merger is dead on arrival. Hopefully the DOJ & FCC blocks the merger so T Mobile can collect their chee$e and move on!

  • Rick Rudge

    Yeah, I’m kind of happy to hear that this will take another 12-18 months. I’m just renewing my year’s pay-as-you-go pre-paid account. In that amount of time, I’ll be able to figure out if the future Sprint/T-Mobile will truly work for me and figure out what I need to do from there.

  • Ashley

    John has some T-Mobile subscribers gassed up for real….

    Some of you are talking about “jumping ship” if the merger is approved but I have to wonder what carrier are you switching to? You don’t like AT&T or Verizon so I guess the prepaid route will be taken but the prepaid brands are up under the big two minus the ones under Sprint… SO I’m guessing a lot of you will be without a carrier.

    Lets all just wait to see what the details are for this possible merger

    • Jay J. Blanco

      That’s what I said, what if it fails they would have bailed for no reason

      • DirkDigg1er

        Jay, I thought you would support the merger due to increase in coverage in your area.

        • Jay J. Blanco

          I honestly do. But borrowing money to merge I don’t like that. If Softbank had the cash on hand sure if would be super happy. But the company will have almost as much debt as Verizon.

        • DirkDigg1er

          I mostly agree, but I think the debt burden is not as bad as it seems. These companies have dealt with these issues for years. Currently, Verizon/ ATT have resources such as backhaul, roaming agreements, landline and TV services. If S/Tmo can poach roaming partners through partnerships and upcoming 600mhz spectrum auction, I think they can turn things around for the better.

    • Tony Chen

      Verizon wireless they have service everywhere you go and no dead zones.

  • D Velasquez

    I welcome the new Softbank USA, hopefully they keep the uncarrier movement with a modified version of the white plan.

    • maximus1901

      So you welcome higher prices?

    • gadget_hero

      If you check the link (http://bit.ly/1mft6TD) it shows that other than some mid-tiered plans Japanese people pay more on average the Americans, and this takes into account the exorbitant prices $T and $VZW plans that were locked in before they started responding to Mr Legere’s uncarrier moves.

    • TechHog

      Uncarrier is dead.

  • mreveryphone

    If softbank is already 9 billion yen in the red how will this benefit T-Mobile? DOJ, FCC, FTC, CIA, FBI, ATF, NSA, all need to be involved in this transaction… Something else is going on here.

  • Alex Zapata

    Ahhhhh! The sky is falling!!! <== that's me still enjoying my awesome TMO service.

  • BigMama

    During possible merger periods, do we see a lull of high-end mobiles being released, because the company that is being possibly taken over, is trying to keep expenses down while clearing a clutter of staff?

    • TechHog

      That’s a given. Also, no more network expansion or Uncarrier phases.

  • Tory

    I’m for it if my T-Mobile service/plan stays the same or gets better. And as long as they don’t merge as “Sprint” I hate that name.. Would rather see “SoftBank” by my bars than Sprint….

  • Diego Encalada

    I believe that many of the people here against the merger going through should head the new company’s purpose, goals and plans for its customers. Many are willing to leave this new merged company because you guys feel it’s going to have negative outcomes. I say that those who are opposed and willing to switch over to AT&T and Verizon should hear the new company out and instead of doing desperate and irresponsible choices, like getting yourselves tangled in a 2-year contract and/or paying high cellphone bills, should get informed about what is to come with the new merged company “SoftBank USA” that may come. Think with your brain and not your hearts and do decisions that could end badly for you guys

    • markx

      If you truly believe that a” Softbank USA” which will carry 75 to 80 Billion dollars in debt will keep current prices youre dreaming. Who’s going to pay this debt? Son? Hesse? Legere? Board of Directors? Stock holders? No…You

      • Jeremiah McCurry

        Softbank has a 40% stake in Alibaba. They could make $40-$50 billion during the Alibaba IPO. They will have debt but maybe not as much as you are expecting.

    • markx

      Says the T-Mobile employee!

    • TechHog

      The millions and millions of subs that will be lost will cause us to be back to square one. Actually, square 0. The duopoly wins the day this is announced.

    • nomobs

      Thanks you Dan Hesse .

  • Sharklover

    If it is approved I would be surprised if it does not force them not to raise prices and keep offering unlimited. Otherwise say goodbye to unlimited.

    • davidr

      And Who’s going to force this new company to lose money? Surely new investors would flock to such a venture. Understand this fact. Softbank USA or whatever this turd would be called will have no cash with tons of debt. In order to pay that debt and operate this company Prices Will Go Up and Unlimited Data will be a memory. It’s all about making a profit.

    • Jeremiah McCurry

      Time is running out on unlimited even without a merger.

  • jacky

    sprint contiunes to to lose more customers.

    http://cdn.bgr.com/2014/01/t-mobile-churn-dropping.jpg

    they have the highest churn rate out of all 4 carriers. they are losing customers like crazy

  • KlausWillSeeYouNow

    Look at that black sludge encroaching on T-Mobile. *shudders*

    The black death. *puts on “Better Off Alone” by Alice DJ*

    • TechHog

      You forgot to plug Dish.

      • KlausWillSeeYouNow

        Lol I didn’t forget… Dish is biding it’s time, imo. I’m still confident/hopeful they’ll do something to pick T-Mo up.

      • 21stNow

        Klause doesn’t have to say a word. The avatar does it for him/her.

  • TechHog

    12 months? 12 months without uncarrier moves and network expansion? I predict 10-15 million subs lost in that time for each company.

    • Jeremiah McCurry

      Losing customers has to be a big concern, especially on the TMO side. At least Sprint has most of it’s customers locked in contracts. The uncarrier subs are more free to go to Verizon or AT&T.

  • Marc Klein

    it’s already been announced that should the merger be approved (and I doubt it will) Legre will be the CEO and Hesse gets kicked to curb.

  • Eric

    I am against the deal. So against it, in fact that I will switch to Verizon if it goes through.

  • j00py

    The debt generated by the buy out is a concern, but the combined spectrum holdings would be nice. That’s only if Softbank can roll out all new network equipment to refarm them within a year or two, and that’s assuming that doing so won’t disable a slew of current generation devices. It would be tedious work and puts them precarious position. If done right it would be nice, but the likelihood of that seems low.

  • barbuto22

    Remember, When sprint merged with Nextel Sprint never converted iDEN Nextel with CDMA of sprint just re-branded phones, made power pack phones that worked on both and let Nextel towers go without any network upgrades. So, chances are soft bank will do the same with T-mobile and sell some world phones like WCDMA that work on both networks. Especially, since T-mobile covers most of the same markets except Sprint has a few more rural markets. Let’s not forget Sprint had only 3G except in major cities had 4G Wi Max until this year Sprint starting adding 4G LTE in more areas. So expect the similar network with more congestion and metered Data with slow network upgrades. Only If the deal goes through. Which I’m against the merger as I have Had Sprint, VZW and ATT all over priced with bad customer service. Plus, how will soft bank pay the billion if the merger fails when they tied up all their money in loans from banks around the world? With a loan?!?