AT&T will be buying T-Mobile USA from parent company Deutsch Telekom for $39 billion in stock and cash.
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”
Stephenson continued, “This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America.”
Deutsche Telekom Chairman and CEO René Obermann said, “After evaluating strategic options for T-Mobile USA, I am confident that AT&T is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices. Also, the transaction returns significant value to Deutsche Telekom shareholders and allows us to retain exposure to the U.S. market.”
The deal could take a year to finalize and still faces regulatory approval, but it would make AT&T the largest carrier in the US by a healthy margin with almost 140 million subscribers.
AT&T was the exclusive US carrier for iPhone from 2007 through 2010 and remains the only GSM/HSPA carrier in the US to offer iPhone. While also a GSM/HSPA carrier, T-Mobile 3G operates at a different frequency than AT&T and is currently not supported by the iPhone.
How and if that will change, and whether or not Apple will support T-Mobile's 3G band in future software or hardware update remains unknown. By the time the deal closes in 2012, however, iPhone 5 will already be on the market.
In terms of consumer choice and pricing pressure, there's still only one iPhone model so selection won't be the issue. Voice prices. Data prices. Tethering prices. T-Mobile was competing with better plans at better prices. The new, combined AT&T-Mo won't do that. Likewise, Apple sells unlocked iPhones directly in Canada and many other countries. Would they do the same in the US once there's no more GSM/HSPA competition? That will depend on their contracts, no doubt.
Again, it will take a year or so for the deal to come together, and there's a lot that could still happen in the meantime. What are your thoughts? Eager to get more spectrum and better potential support for 4G, or upset at the decrease in competition and the unification of GSM/HSPA service in the US?
UPDATE: T-Mobile has put up a new release and it includes the following bullet point about iPhone. (And that iPhone gets its own bullet point shouldn't go without notice.)
s T-Mobile USA getting the iPhone? T-Mobile USA remains an independent company. The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G.