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 Last week's big news regarding AT&T's $39 Billion
acquisition of T-Mobile from Deutsche Telekom has received a lot of media
attention and for good reason. The new AT&T-Mobile will leapfrog over
Verizon's 101.1 million subscribers to become the largest wireless provider in
the U.S. with 130 million. In the coming months, this deal will be scrutinized
by the FCC for possible anti-trust violations, but AT&T has virtually assured
that the deal will go through even though they are on a slippery slope.
Keep in mind this is the same AT&T that was broken up
once already in 1984, virtually all of which (plus more) are now combined again
into "at&t." Stephen Colbert's take on AT&T from 2007 is just as
relevant today, "AT&T is the T-1000 of corporations, no matter how many
pieces you break it into, it always comes back together."
Feeling Confident
AT&T is so sure this deal will be approved that they've
offered T-Mobile $3 billion if it doesn't. AT&T has already convinced President
Obama and the FCC to change their stance on net neutrality last year and they
are confident that they have deep-enough pockets to appease any naysayers yet
again. Since 1989, AT&T has been the #1 corporate donor to congress,
spending over $46 million.
After the merger, which will take over a year to complete, T-Mobile's
3G wireless towers will be repurposed for AT&T's 4G LTE network. This means
at that time, any current T-Mobile handset will stop working, although AT&T
has pledged to help those customers obtain a replacement phone.
What Does it Mean for
the Existing Networks?
If this acquisition is approved, there will only be a single GSM-based
carrier in the U.S. This technology runs the majority of the world's current
cell networks, so this announcement increases handset manufacturer concerns of
a monopoly. Verizon and Sprint both use the competing CDMA technology.
AT&T claims that the combined clout of both companies
will help alleviate many of its customer's complaints about AT&T's network.
However, if T-Mobile's 3G towers will be used for the 4G LTE network, it
remains to be seen how this will help current customers on their lagging 3G
network. Even AT&T or T-Mobile customers who currently own a "4G HSPA+
phone" will be out of luck when AT&T's real 4G LTE network launches near
the end of the year.
Competitors Watching
Closely
Sprint has gone on record to formally oppose the deal, saying it will stifle
competition and innovation in the industry. Verizon has remained neutral on the
subject, saying they are neither for nor against the acquisition. This move has
brought speculation that Verizon will snatch up Sprint, but Verizon has
expressed little interest so far.
What are your reactions to this news? Should AT&T's
uncontrollable appetite bring down the anti-trust hammer on them, or is infrastructure
too expensive for more than one or two companies to maintain?
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Re: AT&T Raises Anti-Trust Concerns Yet Again
