The Case of T-Mobile USA, Inc. & AT&T (2010-2014): Financial Stability, Corporate Governance and Failed Business Processes

Abstract

T-Mobile’s strategy, 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 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 apparent financial distress on its customers, suppliers, shareholders and employees). T-Mobile’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 during 2010-2014; ii) introduces theories of, and biases in Corporate Intrapreneurship, Corporate Governance and enterprise-risk management; iii) characterizes T-Mobile’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 and Strategic Decisions; v) summarizes key factors that may affect companys’ receptiveness to corporate venturing proposals.