It has been a couple of days since this news broke. If you missed it, AT&T have agreed a deal with Deutch Telekom to buy T-Mobile USA for $39 billion. At&t say this will mean that LTE can come quicker to Consumers in the USA and 95% of american’s will be covered. T-Mobile will take an 8% stake in AT&T and invest the rest in their euopean networks. T-Mobile contacts will be honoured but when you renew you will be getting a handset with AT&T’s 3G bands so that the 1700mhz can be used for LTE. Sounds good, though this will leave unlocked phone customers with only one network to choose from. The sale wil probably take a year to be checked out by the FCC and there will probably ny concessions forced on the company. if it doesn’t go through, T-Mobile will recieve a $3billion break up fee.
There are lots of unaswered qustions about T-mobile’s non contract customers, about networks like Simply Mobile who use T-Mobile’s network, and if AT&T can get prices and customer service to levels that will please T-Mobile’s customers. T-Mobile customers have hardly been delighted by the news, and judjing by messageboards, many have been scorned by At&t before and went to t-Mobile to get away from them.
So i have had a day or so to digest this news, both from a personal perspective, and kind of more generally. I am not happy with this deal at all. It’s a land grab by AT&T and they are the key beneficiaries, getting rid of one competitor, and buying infrastructure rather than make it themselves. For t-mobile customers, it’s a bad deal as they can expect higher rates and worse customer service. It’s worse for innovation – t-mobile launched android, have wifi calling. It’s bad for competition – only 3 nationwide carriers, and 80% of the market controlled by 2 of them, and only one GSM provider. This gives AT&T huge control over handsets and renders the unlocked phone market, almost worthless.
Personally, i’m not happy as AT&T isn’t an option for personal reasons. This means nokia phones which are GSM will not even really be an option any more. It also means nokia pandering to the whim of at&t. Actaully, i should stop there with this line. This aspect of the story will get a mention in another post and there is a silver lining to come.
In the end we will have to wait and see. Maybe this will lead us to the LTE promised land quicker, maybe things will get cheaper, or maybe the deal won’t happen at all and regulators will cry foul.
I hope whatever happens is good for consumers, competition and innovation, but i suspect in the meantime at least one of these will loose out.