If you thought the competitive landscape in the US wireless industry couldn’t get any worse, you’d be wrong. Today AT&T announced a landmark deal with Deusche Telekom AG to buy up T-Mobile USA for a whopping $39 billion dollars . The deal which works out to a mixture of cash and stock is being sold to the public as an attempt to improve the network quality for both carriers, while offering a “fast, efficient and certain solution to the impending exhaustion of wireless spectrum in certain markets”.
According to AT&T CEO Randall Stephenson the merger will have an immediate impact on the coverage enjoyed by customers of both networks, and will help significantly with the roll out of LTE network capabilities in the future. AT&T claims as a result of the merge, they foresee a future where more than 294 million people in the US have access to LTE high speed data networks as a result of the combined wireless spectrum of both providers.
It is unknown at this point if the U.S. Government will give its final blessing to the deal, and AT&T will need the FCC’s approval to gain access to T-Mobile’s spectrum licenses. Analysis with MarketWire expressed doubt that the deal would ever clear through all the regulatory red tape, and described the current US wireless market as already being “highly concentrated”.
Only time will tell if a merger between the two companies will ultimately benefit customers, but the combining of wireless spectrum’s isn’t totally unheard of. In Canada Bell Mobility and TELUS combined efforts to build out a nationwide 3G network to help share the cost, however in this case both companies remained independent, and continue to compete for customers.
What do you think? Will the merger be blocked? And if not, will this benefit AT&T or consumers? Let us know in the comments below.