Friday, March 25, 2011

ATT to Purchase T-Mobile: What’s all the Fuss About?

AT&T is set to purchase T-Mobile from Deutsche Telekom for $39 Billion.  The addition of T-Mobile would bring AT&T’s current customer count to a whopping 129 million people.  This would effectively make AT&T the nation’s largest carrier, surpassing Verizon by 27 million customers. 

The proposal has been placed; however, it still requires approval from the both the Federal Communications Commission (FCC) and Department of Justice (DoJ).  AT&T believes this process will take a minimum of 12 months.  While Verizon has expressed little interest in the acquisition, Sprint believes:

The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the 
communications industry.

Interestingly enough Sprint had expressed interest in purchasing T-Mobile prior to the AT&T announcement.   However, this would further widen the gap between Sprint and its competitors and create what some believe to be a monopoly on (Global System for Mobile Communications) GSM based providers.  GSM technology is commonly used internationally making mobile device use while travelling a possibility.  Verizon and Sprint rely on (Copy Division Multiple Access) CDMA technology to provide service to their fleet of mobile devices.  Furthermore, it is believed that this could potentially increase prices for existing T-Mobile customers as a result of AT&T’s more expensive plans and reduced competition between carriers.  While Sprint and naysayers are raising their fists angrily, AT&T is singing a different tune.  They believe that the combination would provide a multitude of benefits.  The single largest advantage they foresee is the ability to roll out high-speed mobile internet access to 95% of Americans using Long Term Evolution (LTE) technology.

Existing T-Mobile customers may be asking themselves, “What does this mean for me?”  The answer is most likely nothing for at least 12 months while the purchase makes its way through the legal system.  T-Mobile is moving forward with plans to release the new sidekick devices and a plethora of new Android based tablets and mobile devices.  The party will eventually come to an end sadly.  AT&T plans to use T-mobile’s current 3G airwaves to rollout LTE services nationwide.  This would render your current equipment useless and force you to purchase an AT&T handset.  This could also potentially increase your reasonably priced plan to a more expensive AT&T plan.  Additionally T-Mobile has a reputation for trying out advanced mobile devices way before their competitors.  They were the first provider to carry Android based mobile phones and were the sole provider of the wildly successful (now obsolete) Sidekick devices.   AT&T did solidfy a deal with Apple for the iPhone (which will not be available to T-Mobile customers… sorry); however, typically play it safe with their mobile device fleet.

We will have to sit on the sidelines for now and watch the legal drama ensue.  I do agree with Sprint when they say that this will dramatically alter the structure of the communications industry.  Whether it will be a positive or negative change remains to be seen.