(Head Honcho)
03/20/11 07:18 PM
AT&T to Buy T-Mobile US from Deutsche Telekom

Oh wow- this is a bit of a shock, and perhaps not a great thing if you're a T-Mobile customer in the US who actually prefers T-Mobile to ATT. ATT let loose with a press release stating that they're buying T-Mobile US from its owner Deutsche Telekom in a cash and stock transaction.

AT&T will pay $39 billion: $25 million in cash and the rest in stock to DT, who will then own an 8% interest in AT&T Wireless. The deal is expected to take a year to complete and it will have to get government approval. We're wondering if Uncle Sam will say "yes" since this deal would mean that there would be only 1 major GSM provider in the US.

This isn't the greatest thing for consumers. Competition drives down prices, but there will be no more serious GSM competition. T-Mobile's creative and more affordable plans would likely go away.

It's unlikely that AT&T would choose to nearly double the number of phones they offer (historically telco mergers don't broaden device portfolios). That means fewer phones to choose from.

T-Mobile's super customer service? Gone once the merger is complete.

The upside is that the merged company would have lots more wireless spectrum and that means AT&T can improve service: from fewer dropped calls to having enough spectrum to really roll out LTE 4G in a big way. They'd also inherit T-Mobile's much better HSPA+ network as a good interim service during the transition to AT&T. The bad news is that AT&T phones would use up to 4 bands for US service alone, and that can present challenges to device makers. Assuming that AT&T uses T-Mobile's AWS band (1700MHz) and 2100MHz for LTE, it also means a weaker LTE signal indoors compared to Verizon's 700MHz LTE (the higher on the spectrum, the weaker the building penetration).

You can read the press release here:


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