Wow! Talk about a surprise (and depending on where you live, a not so happy one). Today via press release, AT&T announced that they have reached a deal with Deutsche Telekom to purchase T-Mobile USA for $39 billion — $25 billion in cash and $14 billion in stock giving Deutsche Telekom an 8% stake in AT&T. According to AT&T’s press release, they look to expand their LTE footprint with T-Mobile’s AWS 1700MHz band along with their own 700MHz band.
Now don’t go crying just yet T-Mobile fans. Just because AT&T gobbled up Centennial and regurgitated their own sub-par offerings doesn’t mean come Monday morning your own network and customer service is going to go from A+ to bouncing off Hell’s gates. The buyout that AT&T is pursuing will effectively create a GSM monopoly in the U.S. (far from the “competition” AT&T boasts in their lengthy press release). As such, expect heavy government scrutiny over the next 12 months (the estimated time it will take to cut through all of the red tape) along with plenty of questions from concerned consumers and politicians alike.
It’s kind of ironic. Several years back, AT&T was forcefully broken up by the government because they were too big and stifling competition. Over the last few years, AT&T has been picking up a ton of small companies here and there, slowly but surely growing back into the giant they once were. Could we be approaching another instance in which government intervention is needed?
T-Mobile fans: What do you think? Is a mass exodus now on the calendar?
Gadgetsteria’s opinion: If the government approves the merger, consumer choice will be severely affected, leaving AT&T to continue their recurring practice of charging more for less while also ensuring the U.S. cellular industry falls further behind international markets.
Press release after the jump…
For better or worse, “exclusive” business deals with between wireless carriers and 3rd party businesses are a fact of life. In some cases, they work out pretty well. In others, not so much. Much like the Verizon-Bing deal, T-Mobile has a newfound friend itself, in Google.
Parent company Deutsche Telekom has gone ahead with releasing the stipulations of the new deal, save for any details involving monetary exchange. Specifically, all T-Mobile Europe phones will default to Google Search. Furthermore, the T-Mobile “home web” will also feature a Google Search icon.
The deal is much further reaching than just Europe, however. It appears all of the companies/regions under Deutsche Telekom control will be getting this change — T-Mobile US will see the effects too. Though it’s worth noting that T-Mobile US moved over to Google Search as the default search provider early in the year when the Yahoo! contract expired.
How’s this sitting with everyone? Anyone out there prefer another search engine over Google?
- November 20, 2009 1:18 pm
Coming last place can get old after awhile. Perhaps that’s what’s fueling T-Mobile’s motivations to actively search for a new U.S. partner if reports from Reuters are to be believed. Currently ranked 4th out of the “Big 4″ US cellular providers (Verizon Wireless, AT&T, Sprint, & T-Mobile), T-Mobile has for some time now been trying to recoup lost ground and push itself ahead of it’s rivals. Part of pushing ahead is expanding the carriers rather weak coverage nationally speaking. Such adventures aren’t cheap mind you as the actual physical motions of adding towers and backhaul capacity are the most expensive upgrades carriers can make. If you’re thinking T-Mobile is looking to purchase another carrier and add to their coverage that quickly, you’ll be disappointed to know that’s not quite how it’s going down. They’re actually looking for another carrier to invest in their network with returns on investments the shining jewel of the partnership. So if T-Mobile really is trying to make new friends, where would they go?
A few possible options include AT&T (as they’re another GSM provider meaning minimal cross network issues), MetroPCS, and ClearWire. Chances of an AT&T partnership while easiest on paper are rather slim. The two largest GSM carriers collaborating has “anti-trust lawsuit” written all over it. Clearwire is…well…Clearwire. It’s pretty neutral. MetroPCS on the other hand while surprising because of their current adoption of CDMA technology isn’t that far from a T-Mo partnership. I mean, they use the 1700MHz band just like T-Mo uses for their 3G network. It is possible. But don’t forget, this isn’t exactly a “take over” partnership that T-Mobile seeks. They merely want someone else to finance a large sum of money now to rapidly build out their network.
Don’t expect anything to happen overnight though. Two unnamed Reuters sources who are familiar with the matter said that while they are anxious to expand the carriers coverage and form new partnerships, there isn’t a big rush and that they are “weighing all of their options”. Overnight success it is not. But further on down the road, T-Mobile could become quite the market dominator. Seem plausible?
Electronista > Reuters
- September 23, 2009 6:51 am
The back and forth movement of T-Mobile USA’s statements in regards to their 4G plans is enough to give most people whiplash. First they’re holding off, instead employing HSPA+ as a nice speed bump along the way. Next minute they’re (their parent company, Deutsche Telekom more precisely) making deals to light 4G services with Clearwire and Metro PCS. Clearwire whom has been cited saying that they needed more money to continue the rollout of 4G services, would have most of their current monetary problems solved with a $2 billion donation from their new friend, Deutsche Telekom. That is if they can manage to keep negotiations and agreements straight.
Worries of available spectrum can be put to rest however as Clearwire CEO Bill Morrow when interviewed by Giga OM’s Om Malik stated that they (Clearwire) “have plenty of spectrum and are flexible enough for new partners and adaptations”. Does T-Mobile’s recent Philliy dwelling, 21Mbps HSPA+ service enough to satisfy your mobile needs for now or are you ready for 4G? Leave your impressions inside.
Giga OM
Image Source
- September 14, 2009 8:35 am
I’m sure many of you can remember back to the good ‘ol days of the AT&T/Bell monopoly. They got big, then broken down, repeat, repeat. Here we are in 2009 and AT&T is growing ever larger (again) and another large acquisition is coming to light. The latest reports have Deutsche Telekom eying a potential purchase of Sprint. First off, the GSM/CDMA compatibility is a big hurdle. Now you have two completely different technologies to watch after. Second, the merger would create a giant #2 U.S. carrier with 78.2 million subscribers — just behind AT&T’s 79.6 million. The merger would also knock down the “top” U.S. carriers from 4 to 3: T-Mobile, Verizon, and AT&T. If we’re in an age that focuses so heavily on preventing monopolies, why are they being allowed to build back up?
