T-Mobile customers, welcome to AT&T Land, population: you. In a bold move, AT&T has acquired T-Mobile USA for a jaw-dropping $39 billion from Deutsche Telekom.
AT&T will now be the largest carrier in the U.S. by a long shot, since AT&T and T-Mobile USA combined have 39% of the market.
(For those who remember Ma Bell, this is starting to seem a bit familiar, isn't it?)
Aside from shareholders, who stands to benefit from this massive merger? Here's a quick rundown of some early predictions:
Will T-Mobile customers get iPhones? No. Well, not yet anyway. T-Mobile will remain independent (and iPhone-less) until the deal closes, which should take about a year. As for what the deal does mean for current customers, T-Mobile is staying quiet, noting only that it “will honor all contracted plans that are entered into before the change of ownership.”
Will AT&T customers get better coverage? That's supposedly what this deal is all about. AT&T claims the merger will provide an enhanced data network, and increase the number of AT&T's cell towers by about 30 percent in densely populated areas. Acquiring infrastructure is faster than building it, so once the deal is approved, AT&T should start seeing some network improvements.
What will happen to Sprint? Hard to say, but their stock fell more than 13% in early trading Monday on the news. Sprint now has the difficult challenge of being a distant third player in the wireless market, and likely needing to stay in line with whatever standards AT&T and Verizon set. More fallout from an industry with reduced competition—and reduced choice.
Isn't there a chance an enormous corporate merger of this kind will get tied up in an antitrust regulatory battle? Check out the big brain on Brett! Yes, there's a lot of concern and interest around that possibility. One analyst wrote, “We have never seen a deal with more regulatory risk be attempted in the U.S. It is unlikely that AT&T would attempt a deal that they knew would fail; however, we can’t see how they would get this through without massive divestitures and concessions.”
What's the bottom line? It really depends on who you ask. Either this is a great move for consumers, providing us with powerful new wireless assets and technologies—or it reduces our options, crushes innovation, and sets us all up for another corporate monopoly.
What's your take on the AT&T/T-Mobile acquisition? Does it seem like good news or bad news?
Image via T-Mobile