AT&T & T-Mobile: The Early Reactions

AT&T has proposed to acquire T-Mobile for $39 billion, taking in a network competitor that’s also well-prepped for purchase. The potential buy has already raised questions about AT&T’s regulatory affects, and how the telecom giant intends to push through a doomed deal. Merging any two companies of this size and stature would be a difficult digestion process, but is it something AT&T, or T-Mobile for that matter, needs to do?

Credit Susisse analyst Jonathan Chaplin offers an industry reaction referenced at this early stage, noting AT&T’s possible behemoth of a wireless subscriber base. It would push AT&T ahead of its competitors, namely Verizon, from a numbers standpoint, with 130 customers compared to Verizon’s 94-102 million. Sprint would also be an distressed bystander, with an estimated 49.9 million subscribers.

But that still leaves the antitrust implications, which Chaplin writes that he has “never seen a deal with more regulatory risk be attempted in the U.S.” He goes on to say that since “It is unlikely that AT&T would attempt a deal that they knew would fail,” the company may be willing to make “massive divestitures and concessions” to get this deal accepted.

While AT&T has had some notable changes as of late, especially since losing its exclusive retail partnership with Apple, a T-Mobile wrangle trumps AT&T’s heavily marketed Android initiative. What remains for AT&T in its much-needed reformation is network and customer service improvements. The network’s broadband moxie would get a boost with AT&T’s $8 billion infrastructure proposal, eliminating its competition and addressing the national broadband needs put forth by President Obama.

As the FCC’s own National Broadband Plan is a heavily debated layout for delivering internet access across the U.S., and it’s development’s trudged along at a very different pace than consumers and wireless service providers would like. The question of how data is distributed has far-reaching consequences for AT&T’s products and services, and a T-Mobile acquisition will certainly attract the attention of government officials.

So far, AT&T’s arguments stand do “strengthen and expand critical infrastructure for our nation’s future…to help achieve the President’s goals for a high-speed, wirelessly connected America.” But the radical move also reveals AT&T’s desperation for a nationwide power revival.

http://crichton007.wordpress.com crichton007

I would be surprised if many of the T-Mobile customers remain with AT&T. T-Mobile has slotted itself as a budget carrier while AT&T has tried to slot itself as a premium carrier (heck they nickel and dime for a lot more than Verizon does). It just seems to me that this is one bad network buying a worse network.
doubleang

@crichton: As a longtime T-mo customer, I would probably jump ship. I’m not with Tmo for the ‘budget carrier’, but because the customer service is awesome and they treat me well.

My question would be whether this is just AT&T attempting to squash the merger of Tmo and Sprint by upping the ante? Granted, I havent been following the details of any of this, but it sure sounds like it considering I have never heard of AT&Ts interest until after Sprint…
mjkoch

I do not understand our government. The best way a free market can work is when there is competition. With competition prices can be lower and service must be good or else you can easily lose business and revenues to your competitors. In the cellular market we will have only two choices: AT&T or Verizon. In the cable t.v. market most localities have only two choices of providers: Comcast or DirectTV, or Verizon or Direct TV.

We continue to allow larger companies to acquire their smaller competition and the result is higher rates and fees, much poorer service, and no where else to go if the consumer is unhappy. If we want to compete with the growing Chinese and Indian markets we do not have to give monopolies to a major cable company such as Comcast and to allow two cellular carriers to control the market in America.

Instead of trying to make our products more appealing overseas we are allowing the American consumer to get fleeced and the sad thing about all this is that most Americans don’t seem to care and probably would not care if there was only one cable tv provider in America and only one cellular carrier, and even if there was only one airline. If you care about the quality of customer service you receive and the money you shell out every month in fees to these companies you should demand the government stop allowing acquisitions and mergers.

If this latest acquisition/merger is approved all that it will guarantee is thousands of people thrown out of work so AT&T can achieve cost efficiences. It’s bad enough that we cannot purchase a computer without being routed to the Caribbean, India, or the Philippines for customer service to people that we cannot understand and cannot understand us, but when the government allows mega businesses to get larger and larger the consumer never wins, and always loses.
tyrantking

I’ve been a satisfied T-Mobile customer for more than 5 years. I came from Verizon. In 2008, I purchased iPhones from AT&T but paid the early termination fee after a month and took my phones back to T-Mobile. I’ve already looked into Sprint’s plans and have found the one that will work for me once this deal goes through.

Here’s a tip for AT&T, any T-Mo customers who wanted to be AT&T customers already are. The rest of us will avoid you like the plague. Have a nice day Mr. Stankey.