AT&T Buys T-Mobile for $39 Billion

by Avinash Saxena

AT&T just announced a definitive agreement with Deutsche Telekom to buy T-Mobile USA for $39 billion in cash and stock. In a press release, AT&T said the agreement has been approved by both companies’ boards of directors.

If the deal meets regulatory approval, AT&T will be the largest wireless provider in the United States. The company says the transaction will allow it to expand its 4G LTE network to 95% of the population of the United States, and touts enhanced “quality in the near term” for AT&T and T-Mobile customers.

Those of a patriotic bent will be glad to know that the transaction will make T-Mobile USA a U.S.-based company instead of a German telecom company that ironically calls itself T-Mobile USA. However, if you want to use a GSM phone, you won’t be left with many choices if this deal does go through. But in AT&T’s press release, the company emphasized how the U.S. market will continue to be competitive even after this deal:

The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market. For example, in 18 of the top 20 U.S. local markets, there are five or more providers. Local market competition is escalating among larger carriers, low-cost carriers and several regional wireless players with nationwide service plans. This intense competition is only increasing with the build-out of new 4G networks and the emergence of new market entrants.

Is this good news or bad? Both, according to Forrester Research analyst Charles Golvin, who told Mashableminutes ago:

“AT&T’s acquisition of T-Mobile, if approved, brings good news and bad news. The good news: high-speed mobile broadband service will improve in quality and coverage, including — in the long run — those in rural communities outside the reach of terrestrial broadband today. The bad news: the cost of that service won’t come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the US. While clearly troublesome for Sprint and other mobile smaller mobile competitors, It’s also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer.”

 

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