AT&T & T-Mobile: The Early Reactions

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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.