Microsoft and Facebook Stump for AT&T/T-Mobile Merger

Tech giants Microsoft, Facebook, Research In Motion and several venture capitalist firms penned their support for the proposed AT&T/T-Mobile merger in a letter filed to the FCC on Tuesday, stating the increased capacity potential possible through the merger could spur innovation in the wireless marketplace.

While certain other organizations have expressed vehement opposition to the deal, stating concerns over the creation of a duopoly, companies like Microsoft and Facebook stated in the letter they hope the merger can increase network capacity.

The letter appears to be in response to service complications, perhaps due to the app-heavy iPhones and iPads that AT&T carries, that have left the wireless provider struggling to keep up with global broadband standards.

“AT&T’s acquisition of T-Mobile represents a near-term means of addressing the rising consumer demand. For example, the merged company will be able to leverage a larger network of cell sites allowing greater reuse of spectrum and increasing the wireless broadband capacity of the network,” the document states.

Yahoo, Oracle and Qualcomm also signed the letter, as did powerful venture capitalist firms Sequoia, Kleiner Perkins Caufield & Byers and Matrix Partners.

Facebook and Microsoft declined to provide further comment.

Future of Integration

Integration and overlapping infrastructures probably future steps in the wireless network industry.

“The traditional telecom operator model is outdated. I think we are increasingly moving into a system where there will be one or two networking companies. The bottom line is that telco business is becoming more and more a commodity business, and something in their business models will have to give in,” Aapo Markkanen, senior analyst in consumer mobility at ABI Research, told the E-Commerce Times.

Companies like RIM and Microsoft, then, may be making the right decision in jumping on board with a merger, hoping it will alleviate AT&T of some of its capacity issues.

“In the future, we’re likely to have one or two mobile networks that are run by joint ventures made of today’s operators. Services to end-users will be delivered by service providers that lease capacity from those joint ventures,” said Markkanen.

Helping or Hurting Innovation?

Not all mobile providers are in agreement. Sprint, the third largest American wireless carrier, believes the proposed deal would create a dangerous duopoly between the nation’s two largest telecom companies. In a 377-page document filed to the FCC in May, Sprint petitioned to deny the merger. The company claims the vertical integration between the leaders in wireless carriers would “harm competition and consumers.”

The document claims that post-merger, the combined AT&T/T-Mobile would cover about 82 million paid subscribers, giving them 88 percent of the profits from the wireless industry.

The support shown by Microsoft, Facebook and other wireless providers Tuesday did not sway Sprint’s opinion.

“Yesterday’s letters do not change the facts: AT&T’s bid to take over T-Mobile is bad for innovation, investment and competition. Most importantly, AT&T’s takeover of T-Mobile is bad for consumers — that’s why tens of thousands of consumers have contacted the FCC asking to block this transaction. At Sprint, we are proud to stand with consumers in this fight for our country’s wireless future,” Vonya McCann, senior vice president of government affairs for Sprint, told the E-Commerce Times.

Others say that while concerns over killing competition in the wireless marketplace are understandable, increasing capacity for the largest network provider is essential, rather than detrimental, for innovation.

“All these tech companies and their scientists have a vision that this is a dynamic marketplace and their capacity in the wireless network could be fragmented without this merger, which could create a bottleneck for innovation of new services,” ABI’s Markkanen said.

Telecom unions such as the Communications Workers of America (CWA) tend to agree that a deal increasing capacity would benefit the industry.

“These major tech companies, like Microsoft and others, are focused on the need for more spectrum and broadband buildout because that’s what makes future innovation possible and available to people. The devices people use now, like iPads and iPhones, need high-speed broadband. These companies obviously see major constraints on their ability to deploy new products, services and processes. And they know that’s the future,” Candice Johnson, communications director for the CWA, told the E-Commerce Times.

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Intuit’s $12B Mailchimp Purchase Breathes New Life Into Email Marketing

Intuit on Monday announced an agreement to acquire Mailchimp, a global customer engagement and marketing platform for small and mid-market businesses, for $12 billion in cash and stock advances. The purchase could be the linchpin that thrusts the mostly financial software company into solving more fertile mid-market business challenges for its customers.

The planned acquisition is part of Intuit’s mission to become an AI-driven expert platform. With the acquisition of Mailchimp, Intuit will accelerate two of its previously-shared strategic big bets: to become the center of small business growth and to disrupt the small business mid-market, said the company in its announcement.

Intuit’s acquisition of Mailchimp sends a great message to all entrepreneurs around the globe that venture capital is not always necessary, observed Michael Kawula, co-founder of CBA, a marketing agency for YouTube monetization. Mailchimp is a bootstrapped success story that has not raised any outside venture capital.

“This is a very clever growth strategy for Intuit, who wants to get in front of SMBs, which is difficult and expensive. Similar to HubSpot’s recent purchase of The Hustle newsletter, a much smaller acquisition, this also is brilliant,” he told the E-Commerce Times.

The acquisition marks a significant impact in industry, according to Osiris Parikh, sales marketing manager at Lilius. He also sees the deal as another reminder that email marketing is not dead — and data is power.

“Intuit has made a strong move to broaden its portfolio and become a leader in catering to the needs of SMBs. It is also a great story of success during Covid-19,” he told the E-Commerce Times.

Deal Basics

Intuit provides a global technology platform that makes TurboTax, QuickBooks, Mint, and Credit Karma. Intuit and Mailchimp will offer an innovative, end-to-end customer growth platform that allows customers to get their business online. It will also enable them to manage marketing, customer relationships, payment processes, and access insights and analytics, along with optimizing their cash flow and staying compliant with experts at their fingertips, according to Intuit.

Key to this process is Intuit’s ability to enable businesses to combine their customer data from Mailchimp and QuickBooks’ purchase data to get the actionable insights they need to grow and run their businesses with confidence.

“We’re focused on powering prosperity around the world for consumers and small businesses. Together, Mailchimp and QuickBooks will help solve small and mid-market businesses’ biggest barriers to growth, getting and retaining customers,” said Sasan Goodarzi, CEO of Intuit.

Mailchimp brings to Intuit technology at scale along with global customer reach.

Founded in Atlanta, in 2001, Mailchimp began by offering email marketing solutions. The company evolved into offering customer engagement and marketing automation processes fueled by an AI-driven technology stack. Mailchimp’s data and technology spans 70 billion contacts and more than 250 rich partner integrations. Its AI-powered automation at scale fuels 2.2 million daily predictions.

“Over the past two decades, we have vastly expanded and evolved Mailchimp’s platform to help millions of small businesses around the world start and grow,” said Ben Chestnut, CEO and co-founder of Mailchimp.

Why Mailchimp’s Worth It

While the email marketing sector is pretty crowded, Mailchimp stands out in terms of size and scope. The company reportedly has 13 million total global users, 2.4 million active monthly users, and 800,000 paid customers, noted Charles King, principal analyst at Pund-IT.

“Plus, half of its customers are outside of the U.S. Additionally, while people tend to focus on the mass/might of large enterprises, small businesses are really the heart and soul of most economies,” he told the E-Commerce Times.

The acquisition likely represents a lucrative opportunity for Intuit to integrate Mailchimp data with QuickBooks and provide greater analytical capabilities to customers. The synthesis of financial and marketing data in this case provides valuable and actionable insights about an organization’s clients, added Lilus’ Parikh.

“It’s also a great diversification of offerings to centralize SMB operations through one platform and benefit from Mailchimp’s established user base,” he said.

Another supporting factor for Intuit’s interest in Mailchimp is the renewed stature of email, according to Elice Max, co-owner of EMUCoupon and someone who has been involved in online marketing for eight years.

“Email marketing has made a comeback in recent years. With increased digitization caused by the pandemic, all digital mediums including email have gained a renewed importance,” she told the E-Commerce Times.

Email Marketing’s Resurgence

Technology giants are looking to build more integrated and holistic solutions. Microsoft recently bought Clipchamp, a video production tool. Both companies are looking to build platforms for the new tech-savvy SMBs, Max Suggested.

“More than anything, it means a renewed confidence in the field. Experts have been talking about the death of email marketing for a while now. But a $12 billion acquisition by a big player like Intuit means email promotion is alive and kicking,” she said.

Another factor is Intuit keeping its eye on the ball. It is important to remember the significance of Mailchimp as the pioneer in marketing automation and email marketing in particular.

“Intuit is looking to make a statement that it wants to become more than a financial software company,” Max observed.

QuickBooks Synergies

One of the motivations that lies behind Intuit’s purchase of Mailchimp is its desire to lead a revolution in the CRM capabilities of SMBs, according to Will Ward, CEO of Translation Equipment HQ . Think about the effect the pandemic has had on the popularity of remote work and the amount of remote SMBs being established.

“You would expect there to be a lot of growth potential here in the next few years. With Mailchimp and QuickBooks, Intuit is providing an end-to-end customer growth platform, and with around $20 billion invested already its belief in SMBs is evident,” Ward told the E-Commerce Times.

Like any other system that handles transactions such as orders and payments, you need to work closer to the actual customer channels. With the Intuit e-commerce product, launched about a year ago, this seems like a natural step by adding marketing automation and reaching out with its e-commerce offering to the MailChimp customer base, suggested Johan Liljeros, general manager and senior commerce advisor, North America for Avensia.

“The acquisition has added synergies between the platforms while still being able to operate as independent platforms. Looking at Intuit’s offerings, it appears they are moving towards expanding [into] digital transactional experience,” he told the E-Commerce Times.

Final Thoughts

Email marketers should be ready for disruption along with other business services providers. Intuit has been both savvy and aggressive in the way it built its business, effectively becoming the 800-pound gorilla of small business accounting and tax solutions, according to Pund-IT’s King.

“With that kind of ally behind Mailchimp, life is going to become a whole lot more ‘interesting’ for other email marketers,” he predicted.

The Intuit-Mailchimp deal should offer Intuit customers significant benefits, such as new solutions and services for bolstering their businesses. At the same time, the deal highlights the fact that old technologies can continue to be vital and dynamic.

“For years, many have claimed that email is dead or dying and quickly being replaced by whatever the tech du jour happens to be. Mailchimp — and now Intuit — beg to differ,” King quipped.

Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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