Legal Final Paper: Overview of T-mobile Writing Assignment

Legal Final Paper
Name
Institution
Date
Legal Final Paper
In today's contemporary business environment, mergers and acquisition are used by many companies to accelerate their business and expand the market share. Mergers of two companies can impact on the business development that is why companies need to be prepared to face challenges in the global market(Cohan, 2017). T-mobile is an example of how companies are adopting different strategies to expand its presence both locally and within international markets despite the challenging business environment. T-mobile's recent announcement of a planned merger with AT&T is one of the attempts to enhance their position in the market. The company has continued to struggle to gain competitive advantage using several strategies.
Even though the main idea behind mergers is to enhance the position of the new company in the market, the problem and challenges associated with mergers can deteriorate the companies' position in a short run perspective (Cohan, 2017). Like other companies, T-Mobile needs to carefully plan for the possible challenges, focusing on maintaining quality and improve its knowledge in management to achieve a positive performance. T-Mobile is faced with some regulatory and political issues both in the domestic and international markets that it needs to address to improve its competitive advantage (Neuman, 2017).
Overview of T-mobile
T-mobile is the fastest wireless and carrier company in the US, according to its customer growth witnessed since its inception. T-mobile is the largest companies providing both data and voice communication worldwide. T-mobile is a German-based mobile phone network established in 1985 known as Deutsche Bundespost Telekom. The company was later renamed Deutsche Telecom in 1996 before it was privatized and renamed T-mobile (Neuman, 2017).
Currently, T-mobile operates in the US and ten other European countries. The number of its subscribers has exceeded more than 150 million, making it the tenth largest mobile service provider. The year 2009 opener for the company, subscribers lost the ability to use their network and could not call or send messages. The problem was witnessed in high-populated areas because the network system was overloaded. T-mobile invested 10 million Euros upgrading its network, a process that was accomplished in 2011(Neuman, 2017).
The company introduced other new strategies to attract new customers, for example, the contract –free simple choice plan has been widely accepted by customers. The "Uncarrier" is also a new plan targeting new customers. The uncarrier plan entails reducing contracts, subsidizing phones calling rates and extra fees for data and providing early termination fees (Neuman, 2017). T-Mobile has faced several challenges due to the explosive demand for its mobile broadband and stiff competition within international markets(Neuman, 2017).
In 2011, the Deutsche Telekom AG and T-Mobile USA from Deutsche Telekom announced plans to merge reaching an agreement valued at $ 39 billion, a move approved by the board of directors of both companies (Neuman, 2017). The merger was meant to provide optimal services by increasing the capacity. The proposed merger also provided an opportunity to improve the network quality for both companies and customers. The merger was the best option to provide fast, efficient and certain solution to the endless explosive demand for mobile broadband (Neuman, 2017).
The merger was blocked by the United state department of justice because the move will substantially reduce competition within the wireless market. T-mobile has been fairing on well in the wireless market, since 2012 T-mobile stock prices have increased steadily Huesig, Timar & Doblinger, 2014). T-mobile has shown a consistent profit in three years with new subscribers ranging from 8.2 to 8.3 million each year, which added $ 60 per year in its net income (Huesig, Timar & Doblinger, 2014). The stock prices have been steady.
The main reason behind the company growth is the rise in the number of subscribers. The easiest way to increase revenue is to attract new customer. For the last three years, T-mobile has added 8.3 million customers with 3.3 million being postpaid phone subscribers (Huesig, Timar & Doblinger, 2014). T-mobile boost of capturing 100percent of postpaid customers in 2015 and 2016. According to its recent financial report, T-mobile added 1 million new subscribers for its 13 quarters and 1 million in the next seven quarters (Huesig, Timar & Doblinger, 2014).
Focusing on the needs of the customers have helped the company witnessed an increase in the number of subscribers. The company introduced Uncarrier to attract new subscribers, unlike other carriers ,this was a customer-oriented approach aimed at fulfilling customers' needs (Cohan, 2017). Uncarrier is a plan that focuses on improving and expanding the 4G LTE coverage offering devices that meet customers' needs. The uncarrier offer simple and affordable packages with limited restrictions making it an essential strategy of attracting customer offering maximum value for their money (Cohan, 2017).
T- Mobile has eliminated annual service contract making it easier for customers to upgrade devices, they reimburse customers transfer fee when one switch over to other carriers, customers can stream music for free using 20 gigabytes of data (Huesig, Timar & Doblinger, 2014). It also provides messaging and data roaming for travelers at an affordable fee expanding its coverage. The increasing confidence in the services of the firm has attracted investors that have driven stock prices up (Huesig, Timar & Doblinger, 2014).
Internal and external factors affect the performance of the firm
Some of the important factors that determine performance include management, customer service, and technology. T-mobile's position in the market is most affected by external factors including competition, technology, economic growth and changes in the preferences and tastes of customers (Huesig, Timar & Doblinger, 2014). Even though T-mobile operates in the US and international markets like Europe, the Virgin Islands and Petro Rico make it the third largest wireless carrier Behind Verizon and AT & T, T- Mobile faces stiff competition in the US from US Cellular and Sprint Cooperation (Huesig, Timar & Doblinger, 2014).
The comparative advantages that T-Mobile has over the competitors above that have contributed to its growth include the growing number of subscribers, its ability to listen to the needs of the customers, and technology. Technologically T-mobile performance is superior with fast internet speed; the 4G network makes it three times faster than the standard 3G networks. Establishing 4G network bases in Europe and the US give T-mobile a step ahead of its competitors (Aksoy et al., 2013).
In Europe, T-mobile operations cover Albania, Germany, and Austria. The company enjoys greater market share, as it is positioned 2nd in Albania, 1st in Croatia, 2nd in Germany, and 2nd in Austria. However, it still faces competition from Hutchison and Telkom in Austria, Vodafone, Plus an Eagle in Albania, Tele2 and Vip in Croatia and Vodafone and O2 in Germany (Aksoy et al., 2013). T-mobile has a competitive advantage in an international market based on it an experience that focuses on customers and superior technology. T-Mobile was the first company to introduce Google based phone aided by Android technology (Aksoy et al., 2013).
T-mobile faces comparative disadvantage because of its small market share and its prices compared to its competitors like AT&T and Verizon. Having smaller spectrum, and weaker financial and human capital are some of the disadvantages experienced by T-mobile (Aksoy et a.l, 2013). T-mobile competitors have significant spectrum, financial, marketing, human capital and other resources. His competitors have larger network coverage with significant larger spectrum holdings. Due to limited resources, T-mobile is losing its customers at a higher rate. Customers keep on shift...