AT&T Acquires T-Mobile for $39 Billion

By March 22, 2011
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AT&T says better network and better prices are to follow for the US mobile carrier market, but critics say we'll be waiting a while to enjoy any benefits from this merger.

AT&T released talking points (PDF) regarding their Sunday announcement of their acquisition of rival mobile carrier T-Mobile. T-Mobile's purchase price from Deutsche Telekom is $39 billion, expecting to close within twelve months.

Highlighting positive aspects of this consolidation, AT&T's literature assures the media that better network quality, 4G expansion and improved growth potential will compel former T-Mobile customers to stay with AT&T and improve benefits for members of both networks.

This consolidation pushes AT&T past Verizon Wireless to the largest mobile service subscriber base in the US. According to their own reckoning, integrating T-Mobile's infrastructure will result in faster speeds and greater access to content.

Other company-provided reasons that the merger is a great idea: carriers combining means falling wireless prices, wider access to LTE, better performance in Chicago, San Francisco and New York.

But customer and media response has not been all positive. AT&T refers to healthy competition due to the number of carriers that most US mobile users can choose from - including providers Metro PCS and Leap. But regional carriers are not much competition to big national ones, as Ars Technica points out. Small carriers have little effect on national market economics or infrastructure investment. After this merger, AT&T's and T-Mobile's combined market share is over forty percent, while MetroPCS has 2.6 percent, Leap/Cricket has 1.7 percent.

Ars Technica's interpretation of AT&T's "mergers make customer prices cheaper" chart indicates that prices hardly moved after huge mergers. Instead, prices stayed flat in relation to these business acquisitions.

In addition to prices, Gizmodo has poked some holes in network claims. With twelve more months til the deal closes, it could take at least that long for these network improvements to take place. The blog predicts at least two years for most people to enjoy the benefits of this merger. Additionally, legit 4G LTE has not been projected to reach eighty percent coverage until 2013.

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