AT&T just announced it will buy T-Mobile USA for $39 billion. If the transaction gets approved by the government and closes in a year as planned, it will create the nation's largest wireless carrier by far.
While this is great news for both companies, it's an awful idea for consumers - and I desperately hope the US antitrust authorities rake this merger over the coals.
An AT&T/T-Mobile merger at least makes more sense than the silly T-Mobile/Sprint idea which was being bandied about. Both carriers use the same technologies: GSM, HSPA+ and LTE. While they're on different frequency bands, radios which use all of the relevant bands are becoming easier to build.
The merger neatly solves T-Mobile's long-term problem of not having enough spectrum for LTE, the 4G technology which will soon be a global standard. It gives T-Mobile's struggling parent, Deutsche Telekom, a gigantic cash infusion. And it lets AT&T once again position itself as the number-one carrier against Verizon Wireless, which leapfrogged AT&T technologically this year with Verizon's 4G LTE launch.
AT&T is ahead of T-Mobile on building LTE. T-Mobile is far ahead of AT&T on building HSPA+, a intermediate 4G technology that fits right between the carriers' existing 3G networks and LTE. Together, they could have a smooth and powerful nationwide network.
AT&T's press release for the merger backs this up. The combined carrier will be able to build out much more LTE Than AT&T could alone, by combining AT&T's 700 Mhz spectrum with T-Mobile's AWS spectrum.
For stockholders, this all sounds great. With reduced competition and the efficiencies of a combined network, the new company will probably be quite profitable.
For phone owners, tech lovers, and American consumers, this is a total disaster.
AT&T has just announced that they've come to agreement with Deutsche Telekom to purchase T-Mobile USA for $39 billion in cash and stock. Here in the USA, AT&T and T-Mobile are the two GSM wireless carriers, and combined, they currently serve 130 million customers. The deal still needs to be approved by the various regulatory agencies, and the companies have said they expect it to take just about a year before all is said and done. We're sure it'll al go smoothly, and we'll soon be left with just three major carriers in the US. Full press release after the break.