Sued and Screwed: Where Do AT&T and T-Mobile Go From Here?

The U.S. Department of Justice dealt a surprising blow to the proposed US$39 billion merger between wireless providers AT&T and T-Mobile Wednesday when it filed a lawsuit to block AT&T from acquiring the smaller company, claiming the deal would violate antitrust regulations.

The proposed merger, announced five months ago, would combine the nation’s second and fourth largest wireless providers — and, according to the DoJ, lead to higher prices and poorer services due to a lack of competition.

It was a sentiment echoed by multiple consumer advocacy groups and other wireless providers since the deal had been announced. Sprint, the nation’s third largest carrier, has been vocal in its opposition to the deal, asserting it would kill competition in the wireless market.

Some current T-Mobile customers lit up message boards and social media outlets with relief they wouldn’t have to become AT&T customers, and consumer advocacy groups praised the decision as a win for the average consumer looking for fast, reliable and affordable service.

AT&T, however, was “surprised and disappointed by [Wednesday’s] action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated,” Wayne Watts, AT&T senior executive vice president and general counsel, told the E-Commerce Times.

The company reiterated its reasons for the merger, which includes increasing spectrum to improve wireless service, allowing the company to expand high-speed 4G LTE technology to 97 percent of the U.S., and creating jobs.

“We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DoJ has the burden of proving alleged anti-competitive effects, and we intend to vigorously contest this matter in court,” said Watts.

Does It Need It?

The question whether or not the deal is necessary for AT&T to expand its service has been debated. The company is already a leader in service and sales, and a leaked letter from earlier in the summer suggested it might not need the merger to expand 4G LTE service.

However, T-Mobile, along with its parent company Deutsche Telekom, face different circumstances.

Between AT&T and Deutsche Telekom, “I’d say that T-Mobile’s parent Deutsche Telekom needs the deal more. They’ve been intending to exit the U.S. market for quite a while, and if the deal eventually falls though it means that DT will have wasted a lot of precious time,” Aapo Markkanen, senior analyst in consumer mobility at ABI Research, told the E-Commerce Times.

In fact, before the deal was announced with AT&T, Sprint had been in talks with T-Mobile about an acquisition, albeit on a much lesser scale.

“Had they not taken the AT&T route to exit, they would have probably agreed to something less lucrative — but in the regulatory sense less risky — with Sprint. Moreover, it’s unlikely that T-Mobile can ever again command a valuation as high as the one AT&T put on it,” said Markkanen.

Since a deal with the smaller Sprint would be less lucrative and lead to less control of the nation’s telecom markets, it probably wouldn’t receive the same volume of opposition that the AT&T/T-Mobile deal has faced. As an incentive to keep Sprint away from T-Mobile, AT&T even offered DT a $3 billion payout if the deal doesn’t go through, a sum it will have to hand over if the DoJ ultimately gets its way.

“I’d guess the breakup fee was necessary to make DT choose AT&T over Sprint,” said Markkanen.

DoJ Ruling Final?

AT&T made it clear it will fight the suit, and there’s still a possibility some sort of compromise could be made between the company and the Department of Justice, allowing AT&T to buy T-Mobile under a set of tight regulations and restrictions.

However, certain circumstances surrounding the DoJ’s lawsuit suggest the department isn’t in the mood to compromise, according to Peter Carstensen, a professor of law and the University of Wisconsin in Madison.

“There is some real potential for some kind of a compromise settlement. What argues against is that the DoJ was not under any particular pressure to decide [Wednesday] that it would sue,” he told the E-Commerce Times.

“Hence, this looks more like there was a deliberate decision to reject the merger. This is reinforced by the fact that the deputy attorney general participated in the press conference, which suggests that this decision was approved at the highest levels — my guess is that the White House agreed,” he said.

Given the nature of the settlement and industry, T-Mobile probably won’t go forward in pursuing the deal with Sprint, but looking to acquire smaller networks wouldn’t attract the same opposition to a large-scale merger like the one with AT&T.

“But certainly T-Mobile could have acquired some other smaller companies that expanded its network and customer base without any significant risk of antitrust problems,” said Carstenesen.

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Back-Office Finance Automation: The Foundation of a Solid E-Commerce Enterprise

accountant using e-invoice software

E-commerce retailers and direct-to-consumer businesses of all sizes are dealing with a ripple effect of business challenges. These include continued inflation increasing the cost of goods and squeezing customers’ disposable income, global supply chain shortages, increased out-of-stocks, and more demanding customer expectations.

Add to that, the Great Resignation has led to a mass exodus of vital frontline and back-office workers, leaving retailers understaffed and hard-pressed to provide the service that customers want.

Fortunately, new digital technologies continue to help e-commerce businesses innovate by expanding online shopping options, improving forecasting and inventory management with AI-powered analytics, upgrading customer service with RPA customer-service bots, enabling last-mile optimization systems for omnichannel experiences, and increasing customer buying power at the point-of-sale with services like buy now, pay later.

These are all incredibly important capabilities supporting the front end of the business. But there are also technologies that work behind the scenes. like AP automation, that can deliver important value and quick ROI by helping e-tailers and direct-to-consumer businesses streamline cumbersome finance workflows, improve controls and security, reduce costs, empower remote employees, and help offset staff shortages.

FAQ
What are the benefits to e-commerce companies of automating AP processes?

Automating accounts payable processes provides several advantages:

  • Faster, more efficient finance processes and workflows
  • Fewer errors and less manual effort required to correct them
  • More satisfied and productive staff
  • Reduced full-time equivalent (FTE) requirements and operational costs
  • Increased cash-back rebates from suppliers
  • Happier vendors better positioned to support supply needs
  • Better cash flow management
  • Reduced risk of fraud

Manual Processes Create Inefficiency and Hinder Growth

Businesses still receive a surprisingly high number (25%) of paper invoices, and 47% are not using any type of invoice workflow automation solution. E-commerce is no exception. In my experience working with e-tailers and direct-to-consumer businesses, many are still making more than 50% of their supplier payments via check.

AP staff at these businesses are wasting valuable time and effort opening paper invoices, capturing and entering data, emailing or calling approvers, printing and mailing checks, and responding to questions from suppliers.

It’s a problem in any industry, but it becomes even more complicated in e-commerce where finance teams tend to manage many supplier invoices. In addition, as supply chain disruptions continue, it’s important for e-commerce businesses to do everything they can to maintain reliable inventory sources. This includes getting key vendors paid on time.

The Power of AP Automation

Modern accounts payable solutions can automate the entire invoice-to-pay process by providing a single workflow to capture invoices, automatically sync data in ERP and finance systems, simplify approvals, and send payments however suppliers prefer to receive them, whether that’s check, ACH, virtual card, or even cross-border.

These solutions can address much of what an e-commerce business needs including vendor onboarding, invoice capture, coding, approvals, and supplier management — as well as payment authorization, execution, and reconciliation.

The benefits to accounting and finance teams are obvious, but they also provide important advantages for many other parts of e-tail and direct-to-consumer businesses. Here are six examples:

1. Streamlined Invoice Workflows

Many finance teams spend the bulk of their time on manual, paper-based invoice processes. Full invoice-to-pay automation captures and codes invoices with far fewer errors than manual data entry and significantly reduces time spent processing invoices.

2. Improved Visibility and Control

Intuitive tools and centralized reporting provide users with detailed views of days payables outstanding (DPOs), pending or past-due invoices, and other category reports. In addition, specific employees can be granted access to the same level of reporting to gain real-time insights into invoice processing.

These capabilities help e-commerce businesses make the right decisions related to payment timing to maximize working capital and take advantage of early-pay discounts.

3. Reduced Costs and Generation of New Revenues

AP automation delivers where it matters for e-commerce businesses: top-line revenue growth and a stronger bottom line. Eliminating paper-based processes and manual data entry and using e-payments can reduce costs per invoice by up to 430%. In addition, rebates from virtual card payments can generate significant new revenues delivering a complete ROI while funding other parts of the business.

4. Increased Staff Productivity

The time employees spend on manual payment processes could be spent on higher-value initiatives such as optimizing receivables, providing proactive support to suppliers, or developing new internal processes.

For managers forced to multitask, it means less time in the back office and more time focused on customers. When hiring back-office help is tough, AP automation helps e-commerce businesses grow without adding headcount.

5. Empower Remote Work

AP automation allows finance staff to review and approve invoices or pay suppliers from anywhere, using any device. Similarly, month-end closing and AP audit data can be accessed remotely, further minimizing the need for staff to be in an office or store.

6. Stronger Vendor Relationships

Brands, wholesalers, and other suppliers are the lifeblood of any e-commerce business. The industry is already suffering from inventory issues; the prospect of late or missed payments adds additional risk of disruption.

Improving the ability to pay on time builds better relationships, adds leverage to negotiate discounts, and minimizes the chance of additional supply chain issues.

The Right Strategy

E-commerce is built on digital customer experiences and processes. That same thinking needs to be applied to the financial back office. Automating foundational processes like accounts payable can provide e-commerce operations with proven methods to overcome key supply-side challenges and deliver far-ranging benefits that help all facets of the business.

Matt Friend is VP, product and program management, at MineralTree, a provider of accounts payable and payment automation solutions.

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