Monday, March 21, 2011

AT&T to acquire T-Mobile

T-Mobile USA has been looking for a merger/purchase partner for a while - as #4 in wireless, it's not in a good long-term position to continue to finance periodic network upgrades.  Still, it seemed to be a surprise to industry analysts that the buyer looks to be AT&T (now #2 in the market)
The deal makes a lot of sense for AT&T - both it and T-Mobile use the same basic cell technology, so there shouldn't be any interface problems, and T-Mobile holds some 4G spectrum licenses in areas where AT&T is weak.  It should facilitate AT&T's "Long Term Evolution" build-out that will eventually cover 95% of the US population.
Because the combined subscribers will give AT&T a little more than half of all wireless customers in the U.S., the deal is sure to undergo intense regulatory and anti-trust scrutiny.  Already, critics are suggesting a number of reasons to reject the bid - mostly the same old anti-monopoly rhetoric about big, bad, Ma Bell.  But wireless is inherently different from the old wire-line - instead of local monopolies, wireless is locally competitive in all US markets.  And the old AT&T was never anti-innovation (that's how it achieved and maintained its dominant position in the old telephone marketplace). 
Still, as they say, interesting times...

Sources: "AT&T to Buy T-Mobile for $39 Billion", Information Week
"Meet The Old Ma, Same as The Old Ma," Information Week

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