AT&T to buy T-Mobile

As a longtime customer of T-Mobile, all I can say is … oh, goody:

AT&T said Sunday it has agreed to purchase T-Mobile USA in a $39 billion acquisition that greatly consolidates the wireless industry and tests federal regulators, who will scrutinize whether the deal harms competitors.

The union would create the largest cellular phone carrier in the country and comes as consumers increasingly flock to smartphones and tablets to access the Internet. …

The merger was a surprise, as Wall Street speculated in recent weeks that Deutsche Telekom would sell its T-Mobile USA unit to Sprint Nextel. Those two companies are struggling to retain subscribers as giants AT&T and Verizon Wireless pick up customers attracted to exclusive partnerships to carry Apple’s iPhone and Motorola’s Droid.

AT&T announced Sunday that its board and that of Deutsche Telekom had approved the deal, which includes $25 billion in cash and the rest in AT&T stock.

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I’m already getting e-mail about this acquisition from both sides.  AT&T has even rolled out a new website pushing its side of the story called Mobilize Everything, which sounds more like a military operation than Odyssey Dawn.  Given how much cash AT&T had to disgorge to pay for its rival, it might also be a truth-in-advertising milestone as well.

The acquisition leaves plenty of domestic competition in the field, including Verizon and Sprint, as well as second-tier national and regional carriers.  It does bring ownership of T-Mobile back into American hands.  The question of government intervention in terms of anti-trust actions should be moot.  T-Mobile was on the block anyway, and apparently the only qualified buyers were two of its major competitors.  I’d prefer to have seen some new blood enter the market, and I’m a little surprised that the wireless market isn’t attracting new blood in this instance.  Perhaps investors are leery about further government regulation in the Internet realm, where the money is, and don’t feel like taking the kind of large-scale risk a T-Mobile acquisition would be.

As a T-Mobile customer, though, I’m less than thrilled.  I’ve had poor experiences with AT&T over two decades in an industry heavily reliant on telecoms, both in billing and service.  The merger should make T-Mobile’s slow but steady progress in pushing out its 4G network accelerate simply by adding to AT&T’s, but I suspect that we’ll be seeing usage limitations in our future.  I’d defend this acquisition against government intervention without reservation, but I’d be lying if I didn’t tell you that Verizon and Sprint suddenly look a lot more attractive to me as a consumer.

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David Strom 6:40 PM | April 18, 2024
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