21
Mar
aftermath att tmobile

Now that the dust has settled a little bit on the proposed deal that, if approved, will shake up the US wireless landscape, what more is there to know about AT&T's buyout of T-Mobile? Several stories (reported by All Things D) caught our attention regarding the aftermath of the deal:

Sprint Scoffs At Deal, Says The Wireless Market Would Be Altered Dramatically

While most experts seem to agree that the deal will most likely get FCC and Department of Justice approval, Sprint (not surprisingly) doesn't have a lot of nice things to say about the buyout. The rumors had previously been swirling that Sprint would be the one gobbling up T-Mobile and, whether those talks actually happened or not, that deal most definitely won't be happening now. In a statement, Sprint said that “the combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry. AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor."

Sprint's statement continued with:

If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely by this dramatic change in the structure of the industry.

Sprint obviously sees nothing but gloom and doom should the deal get approved and appears to reacting in a way that calls foul (how many times do you hear a company admit that a competitor is three times bigger than they are?). While the pre-deal wireless landscape featured two mammoths (Verizon and AT&T) and two smaller (but hardly minor) players in Sprint and T-Mobile, the post-deal world will indeed, as Sprint said, be dominated by two companies. Sprint will now be the lone straggler, forever playing catch-up to the bigger kids on the block.

T-Mobile Drops Out Of CTIA Panel

While they didn't specifically cite the buyout as being the reason, T-Mobile has announced that they will no longer be participating in a roundtable keynote discussion that is set to kick off CTIA. The panel, which was going to feature representatives of the four major US wireless carriers, will be moderated by CNBC's Jim Cramer (yes, the loud guy with the props).

Cramer

T-Mobile said to All Things D that they "will not be joining due to extenuating work demands" (that sounds like corporate-speak for "we just got bought the hell out" if I've ever heard it). The remaining three carriers are still lined up to participate in the discussion, which, we can only imagine, will center largely around the deal.

If The Deal Doesn't Get Approved, AT&T Has To Fork Over Big Bucks (And More) To T-Mobile

Should the deal not get government approval, T-Mobile would naturally be in quite the pickle, having spent months (or longer) devoting their company's direction to being absorbed by AT&T. It appears that they covered their behinds there, as there is an agreement in place that AT&T will hand over lots of money and assets, should approval fall short.

If not approved, the deal will cost AT&T $3 billion, valuable spectrum, and roaming agreements to T-Mobile. In a fact sheet (read: pro-deal propaganda) that AT&T posted on Saturday, they said:

In the event the transaction does not receive regulatory approval satisfactory to AT&T and the transaction does not close, AT&T will be required to pay a breakup fee of $3 (billion), transfer to T-Mobile certain AWS spectrum that is not needed by AT&T for its initial LTE roll out, and provide a roaming agreement to T-Mobile on terms favorable to both parties.

AT&T President and mobile unit CEO Ralph De La Vega talked to All Things D yesterday and added the following:

Today when you look across the top 20 markets in the country, 18 of those markets have five or more competitors, and when you look across the entire country, the majority of the country’s markets have five or more competitors. I think if the criteria that has been used in the past is used against this merger, I think the appropriate authorities will find there will still be plenty of competition left.

That sounds a little different than what Sprint had to say above, does it not? Of course these rival companies are starting the campaigning phase of the deal, with AT&T attempting to frame it as an opportunity to provide higher-quality services, and Sprint scrambling to paint it as a duopoly that will only lead to higher prices and poor service for the customers. Verizon has thus far been silent on the deal.

On the list of those with a negative view of the merger is West Virginia Senator Jay Rockefeller (D), who said in a statement:

With every passing day, wireless services are becoming more and more important to the way we communicate. So it is absolutely essential that both the Department of Justice and the FCC leave no stone unturned in determining what the impact of this combination is on the American people.

We wonder: what are your thoughts on the deal? Will it bring customers higher-quality service, or a market without enough competition to allow fair pricing (or perhaps both)? Let us know in the comments.

Source: All Things D [1] [2] [3]

Will Shanklin
Will's typical, run-of-the-mill story is that of 'classically-trained actor turned Android smartphone and tablet writer.' If you catch him quoting Shakespeare, it's not because he misses it, but because he desperately wants his Masters in drama to count towards something.

Sir William dwelleth in the fair haven
Chicago; with his fair maid'n Jess and his
trusty cur, Ziggy.
  • Tyler

    It will bring better coverage , except none of the phones are compatible on ATT's nextwork. Im almost certain they will offer and upgrade, but lose your current plan. They factored in the 39 billion in phone replacements for the transition. (if it goes threw). Edge works on there network but not 3G.

  • Tyler

    It will bring better coverage , except none of the phones are compatible on ATT's nextwork unless there running edge ONLY.

    Im almost certain they will offer and upgrade, but lose your current plan. They factored in the 39 billion in phone replacements for the transition. (if it goes threw). Edge works on there network but not 3G.

  • http://www.slipshft.com Slipshft

    Better coverage to a network that has all but refused to upgrade for years now, not to mention the horrid customer service, and the huge number of layoffs that will ensue.

    I don't think this is a good thing, and I am a customer of AT&T. Not for long as they really are bad at running a customer service based company.

    Oh well... to each his own.

  • http://www.anivision.org Xcom923

    I'm an ex-customer to ATT. I loved them while I was their but the data-caps had me running for the hills. When the Evo came out I snatched that up and I've been happy ever since. Sprint is really the one most effected by this (other than AT&T&T of course) so it makes sense that they are calling foul

  • Chris

    It's good for AT&T customers, but bad for T-Mobile customers. AT&T customers get access to T-Mobile's unburdened network to ease the stress the iPhone has placed on AT&T's network. They also get better access in traditional T-Mobile stronghold areas where AT&T has weaker coverage.

    But for T-Mobile users, they lose T-Mobile's customer support (consistently rated the best of the big four), lose it's cheap unlimited plans, and gain a ton of network crowding. Perhaps the only bright side is access to AT&T's exclusive phones, like the Atrix, although it would have been easy to get one previously and just root it with a new SIM card.

    What's up in the air is the relationship with Google; T-Mobile was Google's closest partner in the US, and it remains to be seen whether AT&T will continue this since it still has one foot in the iPhone camp. AT&T might not be willing to play ball with Google's Nexus series of unlocked phones, although Google may have little choice if they want to market their phones abroad since AT&T will be the only GSM carrier in the US.

  • cooperaaaron

    I think since ATT does not have the iphone to itself, it will probably add more Androids to the mix... My opinion is if TMobile gets to stay around, they will be the "lower end" retailer and ATT will be "upper end" retailer... Or, and this is also my opinion, TMobile will cease to exist, and ATT makes and sells everything under one banner... One year from now, maybe they will have some nice LTE phones for all TMobile users...hopefully we get them for free, but I don't really think so.... :(

  • Lissa

    I gave up on ATT 3 years ago because of their horrible service, and high charges. I switched to T-Mobile and have been happy ever since, now I don't see me staying with them if this merger goes through. This is sad.

  • Joe Blow

    I've been a T-Mobile customer since the Voice Stream days, some 10 years ago. And although I switched carriers once in that time period...to Cingular (AT&T) even, I quickly learned the error of my ways and came running back. Dropped more calls on Cingular in 2 weeks than I ever did with T-Mobile and honeslty don't really know why I switched. I can tell you, though, that if this deal goes through and AT&T takes complete control of T-Mobile, I WILL most defnitley be finding a new provider. And that's really sad after having been with the company for over 10 years. So I vote "NAY" to the merger.

  • http://androidpolice.com LG

    I vote "NO" for AT&T buying T-Mobile. I want it the other way around. T-Mobile buying AT&T. Keep AT&T out of sight and out in site. I am sick and tired of AT&T always had a bad reception since 2001. How many years now had passed, they still did not fix the reception. Leave T-Mobile alone. I will VOTE for Verizon or Sprint but not AT&T.
    Thank you. LG of TEXAS