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  (Source: Comedy Central)

Say goodbye to the T-Mobile girl
AT&T to shake up the U.S. wireless market with T-Mobile purchase

Well, that one came of left field. It was just a few weeks ago that we were talking about the possibility of Sprint snatching up T-Mobile from Deutsche Telekom. However, the tables turned today when AT&T announced that it would be purchasing T-Mobile for $39 billion USD – the actual breakdown will include $25 billion in cash and the rest in stock.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T Chairman and CEO. "It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people.

"This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America.”

The deal would of course have to be approved by U.S. regulating bodies, but if all goes well, AT&T and Deutsche Telekom hope to have the transition finalized within the next year. 

AT&T currently has 95.5 million customers putting in second place behind Verizon’s 102.2 million customers. Adding T-Mobile’s 33.7 million customers will make AT&T the largest wireless carrier in the U.S. by far. 

AT&T is also looking to boost its nascent LTE efforts with this transaction, and will bring the technology to 95 percent of the U.S. population. AT&T will also spend an additional $8 billion over the next five years to boost its infrastructure investment within the U.S. 

We can only hope that the T-Mobile acquisition, broadened LTE deployments, and increased spending on infrastructure will improve AT&Ts famously "fragile" wireless network. 

AT&T made headlines last week – and drew the wrath of many – when it announced that it would start cracking down on users that were using “illegal” jailbreak apps to tether data with their smartphones.

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By ElderTech on 3/20/2011 3:27:43 PM , Rating: 3
As the only other GSM carrier of any size in the US, this purchase of T-Mobile was a very smart move by AT&T to monopolize this technology and to align itself with Deutsche Telekom for international expansion potential. It effectively shuts out the ability of AT&T customers to easily migrate to a different carrier once their contract is up assuming the phone has the appropriate hardware to accommodate the T-Mobile spectrum. And with the potential for more quad-band phones appearing, this will likely be the case.

There are at least two problems with this proposed purchase. First, will it pass FCC and anti-trust scrutiny. That's a big one. While Verizon still will have competition from Sprint on CDMA technology, if the deal goes through, AT&T will effectively have none on GSM. Is that a deal breaker? In the end, AT&T will probably prevail, due to it's wide political influence, but it's still something to watch.

The second problem is integrating the somewhat different bandwidths from and customers of the two providers, from a variety of perspectives including plans and pricing. This will likely be solved over a period of time with new offerings on plans and hardware that's compatible with both, or possibly a conversion to one standard. And in doing so, how will the customer owning legacy hardware fare in this process? That's another big one and a potential problem for both current AT&T and T-Moblile customers and suppliers. I'm guessing Apple will have a great deal to say about how AT&T addresses this issue, and will obviously want to keep their own customers happy, hopefully including those owning older iPhone hardware!

By DanNeely on 3/20/2011 4:35:43 PM , Rating: 2
With ATT and VZW both going to LTE, the competition for 3g techs is going to matter less in the future. They may get stomped on for overall scale, but most likely ATTmobile will just have to sell one set of their customers to a 3rd party in areas with out coverage from a 3rd party, similar to how VZW sold several bocks of altel customers to ATT in order to get the acquisition approved. With luck the number of blocks they have to sell will be large enough to be able to promote a major regional player (eg US Cellular) to national level, or to push Sprint up enough to no longer be a joke.

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