Tuesday, March 4, 2008

SunCom customers can breathe a sigh of relief

SunCom customers can stop living in fear that their cell service would be cut off any day. T-Mobile acquired the train-wreck known as SunCom; salvaging the wireless firm from its certain demise.

Prior the purchase, SunCom had huge debt, regulatory problems, a very dissatisfied customer base racking up record complaints to state authorities, and was primarily recognized for their abusive treatment of customers. The list of hurdles facing the company was almost endless, and self-inflicted. Unable to find refinancing, the only alternative was to sell the company… for pennies on the dollar.

The benefits of this acquisition for T-Mobile are very strong. “Through this acquisition, T-Mobile USA expects to significantly expand its national network to cover 259 million Americans, an increase from 244 million. T-Mobile USA also expects to realize synergies with a net present value (NPV) of approximately $1 billion through reduced roaming and operating expenses. Plus, the company anticipates further upside growth opportunities through the addition of the new markets.”

Inversely, it is not really possible to find any benefits for SunCom in the press release. “These factors also include risks that the acquisition disrupts current plans and operations; the potential difficulties in employee retention as a result of the acquisition; and the ability to recognize the benefits of the acquisition.”

Well at minimum, the good news is that SunCom customers don’t have to worry about their phones going dead.