Sprint customers victim of another hack

Sprint is the latest telco to become the victim of cybercrime as an unknown number of customers have had their personal data eyed over by nefarious parties.

In a letter sent to customers, Sprint has suggested a huge amount of personal information has been exposed to the darker corners of the internet. The hackers gained access via the Samsung ‘add a line’ website, with the total number of impacted customers being unknown for the moment.

“On June 22, Sprint was informed of unauthorized access to your Sprint account using your account credentials via the Samsung.com ‘add a line’ website,” the letter states. “We take this matter, and all matters involving Sprint customer’s privacy, very seriously.”

An ‘add a line’ website is one utilised by third-parties, mainly device manufacturers, if customers want to add an additional phone line to an existing contract with a telco. Sprint offers this feature to customers who would like to add more individuals or devices to existing contracts.

This is of course not the first time Sprint customers have been the victim of the darker practices of the web, with the pre-paid brand Boost being compromised in March. Again, Sprint was not transparent with the severity of the breach, though in this instance a common technique called a credential stuffing attack was used.

Looking at the latest breach, exposure is quite severe. The hackers gained access to phone number, device type, device ID, monthly recurring charges, subscriber ID, account number, account creation date, upgrade eligibility, first and last name, billing address and add-on services.

Sprint has played down the risk in the letter, suggesting no other information ‘that could create a substantial risk of fraud or identity theft’ had been accessed. Sprint might want to play down the severity of the hack, but many will disagree with the laissez faire attitude.

“When attackers manage to hijack legitimate access rights, they can remain undetected for extended periods of time,” said Saryu Nayyar, CEO of cybersecurity firm, Gurucul.

“Many organisations don’t have the ability to identify subtle behavioural anomalies that are indicators of cyber threats. But with advanced machine learning algorithms it’s possible to spot behaviours that are outside the range of normal activities and intervene before the damage is done.”

Details are relatively thin on the ground right now, it is possible Sprint does not fully understand the severity of the breach at this point, though this is further evidence of security being an afterthought. Attitudes are changing for the better, though it is clear not enough firms are secure enough for today’s digitally-defined society.

Four more States stand in the way of Sprint/T-Mobile merger

With each week that passes, it seems to be getting more and more difficult for Sprint and T-Mobile US. Now, four State Attorney Generals have attempted to block the move.

Officially, the 180-day stop-clock which the FCC gives itself to approve any industry transactions has hit 202, and that doesn’t include the ‘pause’ it gave itself. And while the FCC might be taking things at a leisurely pace, it seems the Attorney General Offices around the US are building up a head-of-steam.

Two weeks ago, New York Attorney General Letitia James launched her campaign against the merger, questioning the logic and evidence used to promote the promises of increased competition, a faster 5G rollout or cheaper tariffs across the country. And she seems to have stuck a chord with counterparts in numerous other states.

Initially, James had the support of nine states, but with Hawaii, Massachusetts, Minnesota, and Nevada adding themselves to the suit, the total number of states as plaintiffs is now fourteen.

“The merger of T-Mobile and Sprint would stifle competition, cut jobs, and harm vulnerable consumers from across the country, so unity among the states will be key in defending our citizens against this power-hungry corporate union,” James said.

“We welcome the support from these four additional states, which should serve as a reminder that, all throughout the nation, we have much to lose if we do not take action to protect our people from this megamerger.”

And while this might look bad enough for Sprint and T-Mobile executives, it could get a lot worse. Over the last couple of weeks, letters have been submitted from an additional six Attorney Generals, telling the FCC investigations have begun to check the legality of the merger. Those states yet to declare are Pennsylvania (letter submitted June 5), Arizona (June 5), Delaware (June 18), Nebraska (June 18), Indiana (June 20) and Texas (June 21).

What is worth noting is that there does seem to be somewhat of a political split in in terms of objections here. All of the 14 Attorney Generals who have joined the suit so far are sitting in the Democrat camp. Of the six who are currently conducting investigations, two more are Democrat (Delaware and Pennsylvania) while four sit in the opposing Republican party (Texas, Indiana, Nebraska and Arizona).

Massachusetts Attorney General Maura Healey is objecting on the grounds of reduced competition, Minnesota AG Keith Ellison is attempting to protect jobs and lower prices, Hawaii’s AG Clare Connors didn’t say anything, and Nevada AG Aaron Ford simply said nothing of genuine value.

The most common theme with these objections seems to be focused on the idea of competition. Although T-Mobile and Sprint argue there is a need for more competition in the market, the AGs don’t seem to think so, or at least this isn’t the way to go about it. T-Mobile CEO John Legere might condemn the ‘duopoly’ which has formed at the head of the telco rankings, however the numbers do not lie.

Coverage is increasing, ARPU is coming down and the US should have all four of the major MNOs in the 5G world before the vast majority of other nations around the world. Things could be better in this market of course, but the trends seem to be heading in the right direction. This is a point which has been raised by the AGs; if it isn’t broken, don’t try and fix it.

Unfortunately for Sprint and T-Mobile, the argument of decreasing the number of telcos to increase competition flies in the face of logic, especially when you are removing the two cheapest options from the market. Of course, telecommunications is a capital-intensive segment to operate in, scale is very important, as is access to more valuable spectrum. But, the general consensus in the telco world is more providers is a better approach not less.

There will of course be incredibly loud voices on both sides of the argument, but logic lies with the AGs here. This is not to say the FCC will agree, but overarching trends argue against the need for Sprint and T-Mobile to merge.

Dish said to be close to buying Boost from Sprint

The disposal of assets required to sugar the pill of the T-Mobile/Sprint merger looks likely to be completed by US cableco Dish.

The latest goss comes from Bloomberg, which has been chatting to people who reckon they know what they’re talking about. These mysterious oracles say Dish is ready to drop $6 billion on prepaid operator brand Boost as well as a bunch of other unspecified stuff.

Since Boost has been valued at around $3 billion that’s quite a lot of unaccounted for expenditure. Since US regulators would ideally like a new national operator to be created before it will allow two of them to marge, this probably means some spectrum and whatever else Dish needs to become a viable MNO.

Apparently the WSJ had written a similar story last week so these telecoms Deep Throats are being nice and busy. Presumably they’re affiliated to the interested parties in some way and are floating trial balloons to see gauge broader sentiment on such a deal. None of the share prices of the companies concerned did much in response to the revelations.

Light Reading has reported on commentary from an Analyst who doesn’t think this is a great idea. He notes that it looks like a lose/lose since it takes spectrum away from TMUS/Sprint and cash away from Dish, in both cases depriving them of commodities they’re already short of. But big M&A usually ends up being about the egos of the big shots involved and if all those concerned fancy the idea they’ll probably go ahead regardless.

New York rages against T-Mobile/Sprint merger

Things are already looking dicey for the proposed merger between T-Mobile US and Sprint, and then New York’s Attorney General wades into the saga with scathing opinions.

“This is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent,” said Attorney General Letitia James.

Support for the merger is pretty rare nowadays, though James and California Attorney General Xavier Becerra have filed a multi-State lawsuit to add more fuel to the flames. In total, ten States have been included in the lawsuit, compounding the headaches induced by an already prolonged approval process.

The omens are not looking particularly positive for T-Mobile US and Sprint.

“When it comes to corporate power, bigger isn’t always better,” said James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country.

“That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

T-Mobile US and Sprint are promising a cheaper and faster service, as well as a challenge to the dominance of AT&T and Verizon, but this isn’t enough to convince the legal heavyweights. It’s the same argument which is evident throughout the world of mergers and acquisitions; four to three does not encourage optimism.

Perhaps the most damning argument against the merger is market trends over the last decade. According to the US Labor Department, the average cost of mobile service has fallen by roughly 28% over the last decade, while mobile data consumption has grown rapidly. T-Mobile US and Sprint might argue a merger is better in the long-run for competition, but there is an old saying; if it isn’t broken, don’t fix it.

With four telcos competing for valuable post-paid subscriptions, the consumer does appear to be winning. Tariffs are expensive in the US, though they are becoming cheaper. Another interesting aspect to the lawsuit points to some skulduggery from the duo.

The Attorneys General’s investigation into the merger found that many of the claimed benefits were unverifiable and could only be delivered years into the future, if ever. Specifically, the AG’s are referring to the lightening speeds promised and the ease at which the duo believes a 5G network can be rolled out nationwide. This isn’t necessarily stating it is not possible, just that the claim is not supported by evidence.

For a decision which is likely going to be based on evidence provided, this is a very simple, but powerful argument for blocking the merger.

Amazon rumoured to be rummaging around Boost

Amazon is rumoured to be one of the parties interested in purchasing Sprint’s prepaid Boost, and while it might be a long-shot, all rumours eventually seem lead back to Amazon at some point.

According to Reuters, two individuals have suggested Amazon is in the market to purchase the prepaid brand, a casualty of concessions put in front of the telco if it is to realise its merger ambitions with T-Mobile US. While any divestment in Boost is only a potential outcome for the moment, if Sprint and T-Mobile US want to get the merger greenlight from the FCC, ditching one of the prepaid brands would be one of the three conditions.

Of course, what is worth noting is that Amazon is not the only interested party. Boost founder Peter Adderton has also shown interest in buying back the company he sold to Sprint in 2006. Funnily enough, Adderton has been one of the critics of the merger, though his tune seems to have changed since the opportunity to get a deal on Boost emerged…

This is nothing but speculation for the moment. Any divestment in Boost would depend on the merger between Sprint and T-Mobile US being approved, an outcome which is far from guaranteed considering alleged objections from the Department of Justice on the grounds of competition.

That said, a yes is a distinct (but fleeting…) possibility. And Amazon would of course be in the picture.

If Amazon is good at anything, it is a master at selling the brand and draining customer’s wallets for an extra couple of quid each month. Connectivity is an interesting prospect for Amazon, as while some might question why it would want to get involved in such a messy and decreasingly profitable industry, but there is an opportunity to create innovative products through bundling.

According to Ovum’s lead analyst for fixed and mobile Dario Talmesio, this could be an option for disruption. For the core eCommerce business, Amazon offers a premium delivery service for physical goods. For its digital assets, such as the content offering, why couldn’t it do the same? Connectivity is the delivery function of online services, so it is a similar concept.

The big idea here is adding value. Amazon might not necessarily make a significant profit from connectivity, but connectivity as a value add could have a compounding effect on the digital content business.

“Amazon is known for regularly screening the horizon for all kind of opportunities,” said Talmesio. “When it comes to MVNO-like connectivity, Kindle was in industry-first example of providing free (data) delivery, which was included in the cost of the subscription or purchase of the electronic books being downloaded. There is a reason why there should not be looking at replicating the same business to other services.

“Connectivity is a mean to an end: if you want to provide a frictionless retail shopping experience, for instance, why not include connectivity as part of Amazon Prime or Prime video or, in B2B why adding it to AWS services.

“The boundaries between connectivity and cloud are blurring, and the timing could be right for Amazon to redesign the connectivity business the same way they redesigned logistics, retail, and public cloud businesses.  Amazon is all about introducing excellence in processes that need to be turned into customer-first and digital first, adding connectivity to their existing plans makes sense, as long as it also makes financial sense.”

A new approach to telecommunications and connectivity is perhaps something which the industry, or more accurately, customers are craving.

Some might consider the telcos are in a slightly precarious position. For years, customers service and experience has been considered an afterthought, and it shows. This has the potential to create a scenario where the retail business of the telcos can be disrupted by those who take a more attentive approach to customer service.

A recent survey from Matrixx suggests 85% of UK and US consumers would consider switching to an Amazon mobile connectivity contract if the option was available. 64% also said they would switch providers to get a similar experience to their favourite apps. The internet giants might not be set up to manage infrastructure, but there may well be interest for alternative brands to manage the customer relationship.

Over in the US, Google Fi is looking like it could be a success as an MVNO, though it is still early days, while in the UK, Giffgaff is gaining traction month on month. Both of these brands demonstrate that an attentive approach to customer service and delivering an innovative service to customers will gain interest from bewildered and frustrated consumers.

Of course, what is worth noting is that this is not the first time Amazon rumours have focused on the connectivity world. Back in 2012, Amazon launched an MVNO service in Japan. In 2014, it launched the Amazon Fire Mobile, though this was pretty much a disaster. In 2015, there were rumours of a US MVNO service. Earlier this year, it was revealed Amazon had partnered with low-orbit nanosatellites firm Kuiper Systems. And of course, customers can buy embedded connectivity with Kindle products.

This is nothing but market speculation for the moment, and while it would surprise a few to see Amazon connected with connectivity, there is a nice fit with other aspects of the business.

T-Mobile/Sprint merger might be heading towards a ‘no’ – report

The merger approval process is heading towards the business-end of proceedings, and the omens are not looking particularly healthy for T-Mobile US and Sprint.

The longer the process takes to complete, the more of a feeling there is the transaction might be denied. As it stands, the FCC has seemingly lit the green light, though it does not appear the Department of Justice (DoJ) is on the same page.

According to reports from Bloomberg, the DoJ is considering additional concessions which would force T-Mobile US and Sprint to create a fourth national MNO to preserve competition. How this would be achieved is not detailed, but it is difficult to see how the duo would be happy with this outcome.

If reports turn out to be true, the concessions bar might be set too high for the parties to be comfortable. This is of course assuming the DoJ is happy with the plans laid out by T-Mobile US and Sprint to satisfy the alleged concession.

The long-standing justification for this merger is to create a more competitive alternative to AT&T and Verizon. To do this, T-Mobile US and Sprint executives have argued combining the network and spectrum assets is imperative. This is where the details of how a fourth nationwide player are needed.

A fair assumption would be the DoJ would insist T-Mobile US and Sprint would spin-off some of their assets to create this fourth alternative. Considering the vast investment which would have to be made, both monetary and time, to establish another MNO from the ground up, it is realistically the only option.

However, spinning-off network and spectrum assets to create a fourth nationwide MNO would most likely weaken the position of the newly combined business. Surely this would undermine the initial justification for the merger? If the merged business does not have access to all the current assets of the pair, would it still be in the same league as AT&T and Verizon?

Critics of the deal are already suspicious of the claims the merged business would be able to satisfy the coverage obligations of the FCC, 97% 5G coverage within three years with no price increases, and what would they say if the DoJ forces the pair to release assets?

These reports also compound theories about the different approaches from the FCC and the DoJ. It would appear the two approving agencies are offering different opinions on a merger for the first time. This can perhaps be explained by the objectives of the agencies.

For the FCC, it does appear improving mobile coverage and quality of experience is the main objective, while the DoJ is focused on preserving competition and choice for the consumer. While there might be some common ground between the two objectives, there is also room for opposing opinions.

For T-Mobile US and Sprint, the situation is not looking the healthiest. Accepting these reported concessions might be difficult if the pair are to remain true to their stated objectives, and that is of course assuming the DoJ accept the response on how they will meet the obligations.

It’s all starting to look a little messy for T-Mobile US and Sprint, and we are starting to get stronger feelings no will be the answer at the end of this prolonged saga.

Sprint/T-Mobile US merger set for a $3 billion boost

It looks like Sprint could trouser up to three billion bucks when it flogs its prepaid subsidiary Boost in a bid to placate antitrust authorities.

The Sprint/T-Mobile US merger saga has been going on for so long that people are starting to not care, but a recent set of negotiated concessions were enough to convince the head of the FCC to wave the deal though. The DoJ isn’t so sure, but they might as well go ahead with the placatory measures in the hope that it comes around eventually.

One of the biggest concessions will be selling Boost, a wholly-owned subsidiary of Sprint that specialises in prepaid contracts. TMUS is pretty hot on prepaid, so regulators concluded their combined efforts would take too much choice out of the prepaid market. Since this public commitment doesn’t put Sprint in the strongest negotiating position, the challenge is to get a decent price for Boost.

According to a Reuters report a company called Q Link Wireless is prepared to shell out somewhere between $1.8 billion to $3 billion for Boost. This is coming from the Q Link CEO, apparently, so we must assume it’s legit, but it also seems like a pretty broad range. What would make him pay almost double his lower figure? Some kind of bidding war presumably, so maybe he’s trying to scare off anyone not prepared to go to three bil.

The official line is that it depends on what he sees once he looks under the hood, with Sprint not yet having publicly disclosed key metrics such as churn, popular tariffs, etc. But FreedomPop is reportedly talking to private equity about getting involved and they would apparently be prepared to go up to four bil, so this has the feel of an auction carried out via the media.

DoJ doesn’t share FCC enthusiasm for T-Mobile/Sprint – report

The FCC might have a skip in its step after securing concessions from T-Mobile US and Sprint ahead of the proposed merger, but the Department of Justice is not convinced.

Following the approval from FCC Chairman Ajir Pai, and the vote of support from Commissioner Brendan Carr, Sprint share price rose almost 19%. The long-awaited merger to create a genuine challenger to AT&T and Verizon on a national scale looked to be heading in the right direction, only for the DoJ to be the fly in the ointment.

According to Bloomberg, the DoJ believes the concessions made by the pair do not go far enough. This is a move which breaks with tradition, generally the FCC and the DoJ sing from the same hymn sheet when it comes to acquisitions and mergers, though it appears antitrust investigators are still concerned over the threat to competition.

This is perhaps the nuance between the two departments. The DoJ, and various Attorney Generals throughout the US, are primarily concerned with competition, while the FCC rhetoric has been more focused on securing a more efficient and broader 5G rollout.

The concessions have taken the form of three commitments. Firstly, T-Mobile suggests 97% of the population could be covered by 5G within three years. Secondly, Sprint’s prepaid brand Boost would be sold to preserve competition. And finally, there would be no price increases while the 5G network is being deployed.

Of course, there is a very real risk to competition. Taking the number of national telcos from four down to three will mean less choice in the market. Less choice means less opportunity for disruption, even if the hatred from T-Mobile US CEO John Legere towards AT&T and Verizon is effectively teemed from his ears. There are too many examples through history of abuses when it comes to competition for some to be completely comfortable.

You also have to weigh up the current cost of mobile connectivity in the US. Although much has been done to help the consumer, ARPU is still notably more than in Europe, where competition is significantly higher. According to Moneysavingpro.com, the average postpaid contract in the US is as much as $80.25 compared to $30.06 in the UK. US consumers are already feeling the sharp end of the competition stick, and few would want to risk this difference to increase further.

The question is how much pain the consumer can tolerate in pursuit of leadership in the 5G race. Carr has spoken of his primary role at the FCC being focused on creating a leadership position for the US in the 5G era and part of this will depend on getting 5G in the hands of the consumer as quickly as possible. The sooner consumers have 5G, the sooner US firms can scale new services and products before assaulting the international markets. This is a playbook taken from the very successful 4G era.

With the US taking a leadership position in the 4G world, companies like Google, Amazon, Uber, AirBnB and Lyft thrived. These are companies which would have existed without the 4G euphoria, but success was compounded because of the connectivity gains. We are likely to see the same trend in the 5G world, with new products and services being designed for 5G connectivity. The question which remains is where they will call home.

This is the equation the FCC and the DoJ have to balance. The need to protect the consumer against the drive towards future economic success on the global stage. There is not going to be a perfect answer for this one, the US is gambling on the future success of the economy after all.