March 21

AT&T acquires T-Mobile

AT&T purchased T-Mobile for $39 billion, but what does that mean for the wireless industry and customers in the USA?

This has been all over the news but I thought Minneapolis web design firm, Rocket55 would offer a thorough breakdown of the major winners and losers in this AT&T acquisition of T-Mobile.

The Winners

AT&T. They are easily the biggest winner in this deal.  AT&T is looking at better coverage, a better HSPA+ network, more spectrum, 34 million more customers, and the ability to eliminate an opponent.  When all is said and done, AT&T will sit at the 130 million customer mark.

Deutsche Telekom. T-Mobile’s owner has been struggling with how to improve the number four ranking carrier that was losing more customers recently.  Instead of owning all of a struggling fourth place company, Deutsche Telekom will own part of a triumphant top ranking company.

Verizon Wireless. If this merger goes through, it’ll be impossible for the government to refuse Verizon buying up smaller carriers.  Verizon would probably rather compete with another empire rather than fight a price war against value players, especially since the company has faith in its ability to build a superior network.

Apple and Apple fans. Apple gets 34 million more potential customers for its iPhone and iPad, without having to sign a new carrier deal.  And 34 million people get access to iPhones without having to switch carriers!  Don’t hold your breath though.  This won’t be an option though until the deal is closed, which will probably be another year or so.

The Losers

Sprint.
An optimistic view of this merger for Sprint is that as the last remaining big value player, they’re going to pick up a lot of T-Mobile customers that jump ship. That may be true, although the customers they’d pick up would be T-Mobile’s least profitable ones. But Sprint is really stuck in the middle now between two vast behemoths and a bunch of little, low-cost carriers. Sprint also has a 4G problem: it’s dependent on the organizational mess that is Clearwire. It isn’t clear whether it’s sticking with WiMAX or going to LTE, and what its future path would be in either case.

Cricket, MetroPCS, and US Cellular. As AT&T and Verizon become ever-larger, it becomes harder to sustain a non-national carrier.

Google. AT&T’s CEO Ralph de la Vega once expressed a deep suspicion of Androi, and he’s only allowed OS onto his network with various restrictions.  T-Mobile has always ben cozy with the Google folks, and they’d lose the only US carrier willing to release developer-model GSM phones on its network.

Handset manufacturers other than Apple. Their list of customers just went down by one — and it may go down by more.  Here in the US, handset makers sell their phones to carriers, not consumers.  Phone makers will have one less outlet for their innovations.

T-Mobile employees. One major way any merged company finds savings is through reducing redundancies and employees of the smaller company will probably be found redundant by an AT&T-dominate management.  Expect major layoffs.

Consumers. With fewer options in the wireless marketplace, consumers will see fewer new phones, high prices than if the merger hadn’t happened, and lower-quality service.  After the deal is signed and sealed, check the definition of a business monopoly.  You’ll probably see quite a few symptoms from this specific deal listed under it.

Minneapolis web design firm, Rocket55 is excited to see the story develop!