The Case of T-Mobile USA, Inc. & AT&T (2010-2014): Financial Stability, Corporate Governance and Failed Business Processes
39 Pages Posted: 9 Jul 2015 Last revised: 11 Jun 2017
Date Written: June 1, 2015
T-Mobile’s and AT&T’s strategies, decisions and Strategic Alliances were sub-optimal, didn’t result in sustainable growth; and could have resulted in Deadweight Losses (in both the prices of telecomm services and in T-Mobile’s and AT&T’s stock prices) and reduced Social Welfare (in terms of increased uncertainty; adverse effects of the stock market; employee morale; and the adverse effects of T-Mobile’s and AT&T’s apparent financial distress on its customers, suppliers, shareholders and employees). T-Mobile’s and AT&T’s Corporate Governance problems illustrate the weaknesses of Goodwill/Intangibles accounting (IFRS and GAAP), the securities regulation in the US and European Union, Sarbanes Oxley Act, the US FSOC’s “Non-financial SIFI criteria” and the Dodd Frank Act. This article: i) reviews the earnings management, asset-quality management and poor strategic decision making within T-Mobile and AT&T during 2010-2015; ii) introduces theories of, and biases in Corporate Intrapreneurship, Corporate Governance and enterprise-risk management; iii) characterizes T-Mobile’s and AT&T’s problematic strategic alliances; and provides evidence of patterns of failed strategic decisions; iv) provides evidence of, and characterizes Regulatory Failure within the context of Corporate Intrapreneurship, Operations Strategy and Decisions; iv) explains why the proposed mergers among ATT, Sprint and TMobile were not feasible and how the same business objectives could have been achieved through strategic alliances; v) explains implications for financial stability, and ATT’s and TMobile’s significant potential for fintech; vi) explains how the operations and activities of TMobile and ATT contradicts many theories in the literature; vii) summarizes key factors that may affect companys’ receptiveness to corporate venturing proposals.
Keywords: Corporate Strategy; Decisions; Financial Stability; Fintech; Corporate Governance; Business Processes; Antitrust; Risk; Technology Management.
Suggested Citation: Suggested Citation