Архив метки: Deutsche Telekom

T-Mobile and Sprint have finally announced a merger agreement

Sprint and T-Mobile, after years of going back and forth as to whether they are going to tie up two of the largest telecom providers in the U.S., have announced that the two companies have entered a merger agreement this morning.
The merger will be an all-stock transaction, and will now be subject to regulatory approval. That latter part is going to be its biggest challenge, because it will not only tie up the No. 3 and No. 4 carriers into the U.S. into a single unit, but also that international organizations hold significant stakes in both companies. SoftBank controls a majority of Sprint while Deutsche Telekom controls a significant chunk of T-Mobile. Following the administration’s intervention in the Broadcom-Qualcomm takeover attempt, it isn’t clear what will actually go through in terms of major mergers these days.
Bloomberg is reporting that Deutsche Telekom will have 42% ownership of the combined company, while SoftBank will own around 27% of the company.
As expected, the argument here is for the expansion of 5G networks as plans for that start to ramp up. T-Mobile argues in its announcement that it will help it be competitive with AT&T and Verizon as telecom companies start to roll out a next-generation 5G network, though it does in the end remove a carrier choice for end consumers in the U.S..
“The New T-Mobile will have the network capacity to rapidly create a nationwide 5G network with the breadth and depth needed to enable U.S. firms and entrepreneurs to continue to lead the world in the coming 5G era, as U.S. companies did in 4G,” T-Mobile said in a statement as part of the announcement. “The new company will be able to light up a broad and deep 5G network faster than either company could separately. T-Mobile deployed nationwide LTE twice as fast as Verizon and three times faster than AT&T, and the combined company is positioned to do the same in 5G with deep spectrum assets and network capacity.”
Both companies appeared to be finalizing the deal on Friday, when they set valuation terms and were preparing to announce the merger today. The deal values Sprint at an enterprise value of around $59 billion, with the combined company having an enterprise value of $146 billion. AT&T has a market cap of around $214 billion, while Verizon has a market cap of around $213 billion, as of Sunday.

I’m excited to announce that @TMobile & @Sprinthave reached an agreement to come together to form a new company – a larger, stronger competitor that will be a force for positive change for all US consumers and businesses! Watch this & click through for details.
— John Legere (@JohnLegere) April 29, 2018

The transaction, the companies said, is of course subject to regulatory approval. But, pending approval, it is expected to close “no later than the first half of 2019.”
Disclosure: Verizon is the parent company of Oath, which owns TechCrunch.

T-Mobile and Sprint have finally announced a merger agreement

T-Mobile is reportedly much closer to a merger deal with Sprint

It looks like a potential merger deal between T-Mobile and Sprint, two of the major telecom companies in the U.S., is getting closer and now has set valuation terms, according to a report by Bloomberg.
The deal could be announced as soon as Sunday, according to a report by CNBC. The proposed tie-up of the two companies was called off in November last year, but now that deal appears to be coming closer, with T-Mobile’s backer valuing Sprint at around $24 billion, according to Bloomberg. As part of the deal, Deutsche Telekom AG will get a 69% voting interest on a 42% stake in the company, according to that report. (Both reports, however, disagree on the valuation — with CNBC citing a $26 billion valuation.)
This deal seems to have been a long time coming, and consolidates two of the four major telecom providers in the U.S. into one larger entity. That could, in theory, offer it some more flexibility as they expand into 5G networks. Still, a deal of this scale could still fall apart and would be subject to regulation — with significant international ownership of both companies (Softbank for Sprint, and Deutsche Telekom for T-Mobile).
Sprint shares fell more than 8% in extended trading to under $6, while T-Mobile shares were largely unchanged. Shares of Sprint were up around 8% on the day up to $6.50 in early trading.
A representative from Sprint declined to comment. A representative from T-Mobile did not immediately respond to a request for comment.

T-Mobile is reportedly much closer to a merger deal with Sprint

LevelUp Now Has $21M To Take On The Squares Of The Mobile Payment World

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Mobile payment service LevelUp, an off-shoot of Boston-based SCVNGR, announced this morning that it has raised $9 million from T-Venture, the venture capital arm of Deutsche Telekom. The investment is the second tranche of a larger funding round and brings the total raised to just over $21 million. SCVNGR itself has raised over $31 million. As a result of the investment, T-Venture Senior Manager Randeep Wilkhu will join the startup’s board as an observer.

As for some context: Every day there’s a new headline about mobile payments solutions. It seems that every carrier and credit card company has its own system, while all the big mobile players are working on one or have one already on the market (Google Wallet). The rumors indicate that the iPhone 5 will have NFC functionality to enable Apple’s entry into the mobile payments game. The point is: It’s easy to be skeptical of new solutions, especially when it comes to long-term viability.

Yet, in spite of the apparent saturation and the success of Square and others, no one solution has emerged as the outright leader. That’s why Seth Priebatsch launched LevelUp (as an off-shoot of SCVNGR) in beta last July, hoping to create an easy, carrier and card-agnostic payment and loyalty system that could be used everywhere.

Since then, the company has grown its U.S.-based staff to 162 and Priebatsch expects the team to grow to 200 by the end of the year. As of today, LevelUp users can pay with their mobile device of choice at 3,000 participating merchants, which include Ben & Jerry’s, Quizno’s and Johnny Rockets, and more than 200K users spend a total of $2 million per month using LevelUp. In turn, Priebatsch wants the service to be in 50 cities in the U.S. by the end of the year and said that they plan to announce some even bigger nationwide chains this fall.

So, while there’s plenty of speculation over which of the major mobile payments players will crack the mainstream first, whether it’s Google Wallet, Isis, Pay With Square, or PayPal, perhaps the biggest validation for the service comes from the fact that several of LevelUp’s backers are now investing in the startup on top of their own mobile payment solutions. T-Mobile lent infrastructure and hardware to LevelUp to help it get off the ground, the founders of Discover invested in the startup’s first tranche — and now Deutsche Telekom via T-Venture.

Priebatsch said that he believes this a result of the fact that the startup is religiously attempting to remove the major barriers that prevent people from paying at local merchants with their phones. For now, that means LevelUp relies on the QR code as its main payment mechanism, but down the road that will mean adopting NFC. “We’ll do whatever it takes to get LevelUp into the hands of the masses,” Priebatsch tells us, “and that starts with providing value to merchants so they actually want to consider adopting another mobile payment network.”

To do this, the startup recently announced that it has lowered its merchant interchange rate (a.k.a. “the swipe fee”) to zero. Now, LevelUp merchants pay 35 percent to the startup each time a consumer redeems first-time and loyalty rewards, so, because the revenue from this charge matched the interchange fees, Priebatsch says, the company decided to just go ahead and cover those fees itself. Why not?

In turn, the team hopes that this will offer a better acquisition strategy, removing the friction for many merchants that would participate otherwise. With Square charging 2.75 percent and most others at 3 percent, LevelUp starts to look good in comparison.

Merchants still end up paying more to LevelUp as part of that 35 percent charge, but the founder thinks that it can make up the difference by offering merchants one single solution for customer acquisition, retention, and analytics — exchanging zero credit card fees for a share of that business it creates by way of its loyalty rewards campaigns.

There’s no reason that other companies with big mobile payments solutions (like Starbucks) couldn’t eliminate credit card processing fees, which would mean that LevelUp would have to compete with name brands — further tilting an already uphill battle. In the meantime, Priebatsch and the LevelUp team are pushing to scale the system in the U.S. (and internationally) as fast as possible, hoping to achieve enough penetration in the next year so that, when the cards fall, LevelUp will have a presence that will be hard to ignore.


LevelUp Now Has $21M To Take On The Squares Of The Mobile Payment World

Deutsche Telekom’s VC Firm Makes Strategic Investment In Pinger

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For the last few years we’ve been tracking the growth of a service called Textfree, offered by San Jose-based startup Pinger. As the name implies, Textfree has a very attractive value proposition: you sign up, it gives you a free, real, telephone number, and you can send text messages and make phone calls with it free of charge — the service makes most of its money by displaying ads alongside the texts.

It’s also massively popular: last month alone, users sent and received a total of 2 billion text messages, and it’s one of the most downloaded iOS apps of all time. Even more impressive is the fact that the vast majority of their efforts have been concentrated in the U.S. alone — Pinger is preparing to sweep across Europe this year.

Pinger’s service is potentially disruptive to the telecom world, which is why it’s so notable that the company is now getting in bed with one of the biggest names in the business: it’s raised a $7.5 million funding round led by T Venture, the VC arm of international carrier giant Deutsche Telekom. T Venture’s Investment Director Bernhard Gold will be joining Pinger’s board as part of the deal. The company had raised around $11.5 million prior to this round.

So why, given its disruptive nature, is Deutsche Telekom actually supporting Pinger, with plans to look for various partnership opportunities down the line? Pinger CEO Greg Woock sums it up pretty nicely: “They hate us the least.”

You see, there are several popular services these days that take advantage of the rise of smartphones and VoIP — like Viber and even Skype — which essentially live ‘on top’ of the carriers, without actually using their traditional ‘minutes’ and SMS allotments (instead, they operate via data connections). The downside to these is that users can only communicate with contacts who also have the service’s client installed (or, in the case of Skype, they can pay extra to get a ‘real’ phone number).

Pinger’s Textfree, in contrast, has more in common with the traditional way of doing things. Because you’re given a real phone number when you first sign up, anyone can text or call you without having to download an app themselves. And this traffic doesn’t bypass the carriers’ networks, which means they can still make some money.

I spoke with Bernhard Gold, who is leading the investment. He says that at the end of the day, he’s looking to make money with the deal (in other words, this isn’t a purely strategic move), and he thinks Pinger offers a very strong value proposition. But he adds that because Pinger is operating on the carriers’ infrastructure, it stands to be strong as a partner rather than a competitor. Expect to see a number of integrations and partnerships announced in the coming year.

Pinger is also testing a promising version of its service in Germany right now, which it plans to roll out more broadly in Europe this year. Because of the way carriers pay each other in Europe, offering a free texting service in Europe is a much trickier affair than in the U.S. But Pinger has figured out a way to encourage users to send and receive an equal number of messages, which negates the costs it would otherwise need to pay.


Deutsche Telekom’s VC Firm Makes Strategic Investment In Pinger

AT&T Eyeing Up Dish Network For Potential Acquisition?

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Shortly before the AT&T/T-Mobile merger came to its ignominious end, Dish Network CEO Joseph Clayton casually expressed his interest in a partnership with T-Mobile as a means of bringing wireless voice service to Dish customers.

Those plans may not pan out if AT&T has anything to do with it. A new report from Bloomberg indicates that AT&T is apparently so hard up for additional spectrum that they’re considering shelling out “the highest premium in more than a decade” to acquire the satellite TV provider and their spectrum holdings.

Clayton, ever the opportunist, seemed receptive to the possibility of at acquisition — he noted last week in an interview with Bloomberg West that the company is “open to all possible options.”

“We could be acquired, or we could be the acquirer,” he added.

Clayton’s original vision was to create a “national wireless network” comprised of video, voice, and data services. To that end, Clayton made it known that he would consider a partnership with companies like T-Mobile or Sprint to make it happen. They would get Dish’s spectrum holdings, and Dish would get their expertise in managing voice networks.

It’s questionable whether Dish would ever be able to offer those services if AT&T indeed acquires the company, as it would pose a credible threat to AT&T’s own portfolio of network services. Still, it seems clear that AT&T needs Dish more than Dish needs AT&T at this point.

Clayton seemed more than happy to forge partnerships with the smaller carriers in order make his network vision a reality, but without T-Mobile’s network support, AT&T may be facing a bumpy road when it comes to the rollout of their LTE network. It certainly doesn’t help that AT&T has to yield a portion of their spectrum holdings to Deutsche Telekom as a result of their very-public break up.

Meanwhile, rival Verizon’s LTE network continues to expand (albeit with a few hiccups), and Sprint is also preparing to light up their own around June of this year. Competition will only get stiffer for AT&T in the coming months, and it will take some bold moves for them to stay ahead of the curve. While not the most likely bedfellows, a Dish acquisition could nevertheless be just what the doctor ordered.


AT&T Eyeing Up Dish Network For Potential Acquisition?