UPDATED: AT&T acquiring T-Mobile US, what does it mean for iPhone?

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.

[Business Wire]

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Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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UPDATED: AT&T acquiring T-Mobile US, what does it mean for iPhone?

88 Comments

Unlikely. Carrier mergers result in oligopolies, making it easier for the carriers to agree on pricing and to nickel and dime customers simply because there aren any real competitors. In Canada the mobile market is essentially held by three players, using 6 or 7 brand names. And rates have only gone up...

phuc at$t. that's all. watch, coming up next year, the new data pro plan will be 1GB. that's at$t for ya.

THERE WILL BE NO T-MOBILE IT WILL JUST BE AT&T. PLUS THE iPhone 5 IS "COMING" OUT THIS SUMMER AND I DOUBT THIS DEAL WILL BE DONE BY THEN. BUT THEN AGAIN... IT DOES MAKE SINCE. SO WHEN THEY MAKE THE SWITCH T-MOBILE CUSTOMERS WOULD BE READY.

Will this expand AT&T's cell coverage? I get constant dropped calls and zero bars in many areas where I live. Would AT&T buying tmobile help?

Whoa this came out of no where last time I checked on t-mobile I thought sprint was going to snatch them up

She's got nothing on Catherine Zeta Jones. Nothing.
Hoping this announcement will force T-Mo to reconsider those Gawd Awful fake-Apple commercials. Horrible, horrible marketing strategy.
At least the Apple one's were funny sometimes. My favorite was probably the one bustin' on Windows Vista User Account Control. I LOL'd.

Wow! Really didn't see this coming, but it will hopefully be a good thing for existing ATT and TMobile customers. The main reason I left TMobile was degrading coverage in my area. I've heard it's improved though. This type of acquisition would help ATT push their 4G network nationwide hopefully before the end of 2012 of whatever their timeline was.

If I was on T Mo which I am not and AT&T made the purchase I would leave T Mo. I hate AT&T. Not only reception sucks but customer service sucks. Ma Bell as you put it could not even fix my home phone. Maybe I should thank them cause I had it disconnected for that reason and saved that bill.

Nah, I think this is AT&T's response to loosing iPhone exclusivity. No better way to beef up a nationwide cellular network in a jiffy than to buy a completely different and complimentary one.

Noooooo! So As A T-Mo Customer Thats Basically Telling Me My Rates Went Up And My Service Slowed Down. Awesome! Looks Like Im Jumping To Verizon Or Metro Sadly.

Wow that came out of left field I too was under the impression it was sprint was going to gobble up t-mobile......interested to see how this is going to play out

I'm pretty the incompatible GSM/CDMA technologies was at play here, not the 4G WiFi network that Sprint simply leases anyhow. Regarless, Sprint has all but pivoted to LTE and will likely have a robust LTE network operational before AT&T, which is pretty sad on AT&T's part.

Sprint could still try to go to Verizon at some point, but this deal would make that even more difficult. Also, the cultural differences are big. Sprint has always been pretty independent, doings thing their own way. T-Mobile to AT&T makes more sense than Sprint to Verizon.

ExxonMobile is going to acquire BPAmoco and then AT&T/TMobile. What in the wide world of sports would that company be called? Haha, the NASDAQ ticker on that would 75 letters long!

Can we start making jokes about T-Mobile's ad campaign taking jabs at the iPhone being on the AT&T and Verizon Wireless network now?
Also, what does this mean for the current state of iPhones? Since they are locked to the AT&T carrier, I'm guessing that means that existing T-Mobile customers will either be upgraded to a new SIM (upon agreement to a new contract, similar to that of people who were on the Legacy AT&T Wireless, and "upgraded" to the new Wireless with AT&T) that or a new SIM will be introduced to be able to be used in iPhones?
I am an AT&T user, but feel empathy for the current T-Mobile users, as it wouldn't be too cool if T-Mobile users became AT&T users, but still couldn't use iPhones on their existing contracts...

I think Drew will have some say to that as she's currently (last time I checked) dating Justin Long (the IPhone guy). :)

Holy Crap. This is going to make cellular life in my area interesting... AT&T's native network is lacking - and I-Wireless - a "local" entity holds licenses & owns towers and resells T-Mobile... it will be fun to watch this shake out.

True that! I live in waterloo n I'm interested to see of iwireless will go away or become a new company. Maybe I could finally get an at&t store that isnt 45 miles away in cedar rapids!!

so i have a jailbroken iphone now....i guess i should hang on to it as it might get 3g signal one day?

It means that that add goes away first off all , also it means that AT&T bought it self a girlfriend also AT&T just bought first place.

It means less competition which is bad for all of us as consumers. Now I hope Apple just gives Sprint an iPhone of their very own. It shouldn't be very hard to make since they already make the Verizon CDMA version. At least that would level the field instead of Verizon and ATT ruling us all forever.

Or u could always go...dare I say...android? At least it's a choice on all 3 carriers. I'm still with AT&T on my luscious IP4 and don't think I'll b going anywhere.

Just make sure that we (AT&T customers) don't have to start using GSM bands from the twilight zone! I guess this means that AT&T will be getting all the future Google Nexus phones? Just a thought.

This is both good and bad for the end users. On one side, the coverage will be tremendously upgraded since AT&T will take full advantage of TMo's tech. On the other hand, now the customers will have less competition to choose from.

So does this mean T-Mobile will become AT&T or will there still be T-Mobile, just controlled by AT&T

It means that, despite the ongoing litany of complaints about AT&T infrastructure, coverage, and quality, they just couldn't see anything else, darn it, where they could spend a spare $39 billion.

Paying $39 Billion for an already running, technologically complimentary nationwide wireless network is probably a lot easier and more efficient way for AT&T to instantly enhance their own nationwide wireless network then pouring all that money into flushing out their existing network with all new construction subject to the whims of permitting delays, resource availability, and endless Not-In-My-Backyard related holdups.
Plus, they also get the entirety of T-Mobile USA's subscriber base in the deal. Had they spend the money on their own network they wouldn't have netted them ANY guaranteed extra income to make it worthwhile.
So this is good, if you are an AT&T customer wanting better service.
But then again, it's also bad, as it likely means your cell bill is going to go up; because AT&T isn't going to spend $39 billion dollars doubling the cell towers you can connect through without asking you to help pay for it. Kind of like when every time Dish or DirecTV add more channels you don't watch (or, if you are lucky, some you do), they sorta expect you to pay for them.
Not to mention their will be one less competitor (and NO remaining GSM alternatives) to help keep their prices down.

This sucks and AT&Thas already thrown down the cap hammer for their internet. The FCC should not allow this, but I bet they will and this will become the governments new broadband plan. Google please hurry and light up all of that dark fiber.

Motorola can't spend the kind of money on advertising that Apple does
Motorola's profit last quarter was $21 million. That doesn't leave much room for a huge advertising budget to compete with Apples Billions. I would like to see Best Buy create a tablet section similar to the area where all erreaders are housed.

Maybe they should build phones so outrageously compelling that they can mark them up and sell them for prices high enough to generate the insane profit margins that allow Apple to have so much extra cash on hand. Kinda like when their Razors were all the rage. Only, you know, for the 2010's.

Sounds great to me. The reduction in competition doesn't worry me, since it's been a two company fight for a long time now, but it gives AT&T a marketing boost. Unfortunately, these cellular mergers take a long, long time to integrate completely. In the short term, it will be a drain on AT&T's resources.

That makes since from a corporate standpoint, but from a consumer standpoint, its still one less option...one less more affordable option.

I feel sorry for t-mobile customers... They should switch to vzw once the merger happens, as I imagine any t-mo contracts would be null and void once they get officially "switched" to att

When one company acquires another, it must honor all the contracts and agreements the former company had gotten itself into. Barring any bankruptcy shenanigans.

That doesn't mean, of course, that they aren't allowed to change the terms they offer new customers not already in contract; or that they are necessarily compelled to extend any of the previous company's expiring contracts on the same legacy terms.

AT&T BUYING T-MOBILE ,NOOOOOOOO!!!!!!!@#%%. I WAS HOPING SPRINT WAS GOING TO BUY T-MOBILE . I WONDER WHAT THIS MEANS FOR PEOPLE WITH UNLOCKED IPHONES ON T-MOBILE

Can we say SAD. I mean this is just awful for the competition. Or should I say lack there of. Soon it will be like ordering from a Chinese menu. You can chose from Column A or Column B. Either choice is awful but there isn't anything else.

im goin back to boost there service is just as good if not better in option plus i can use sprint phones on boost without any problems...

I'm seriously hoping that AT&T gobbles up T-Mobile's UMA service and brings it over to the iPhone. That would be UNREAL!

Im hope the merger or buy-out falls through. I cant stand ATT customer service or lack thereof. I tried and left cingular and ATT years ago because the reps could never give me a clear answer to my basic questions and the reps were very rude and disrespectful. I been with tmo for almost 5 years and have been very happy and impressed with how knowledgeable and courteous the reps are. I hope that if this deal goes through the tmo reps rub off on the att ones.

Odd that Deutsche Telekom specifically said "We do not offer the iPhone." And if they don't change their frequency, they never will. I'm hoping that this deal will add iPhone-compatible frequencies to the former T-Mobile cell network while retain the odd 1700MHz frequency for legacy (e.g. non-iPhone) customers.
If T-Mobile's recent decline is due to iPhone stealing their customers, the last thing they would want to do is to shut out iPhone in favor of inferior Android products. But, obviously, none of us knows enough about the deal to know anything yet.

I have a new idea for T-Mobile's commercials, the girl says "I'm T-Mobile." The AT&T guy says, "I'm AT&T." The proceeds to eat the girl, he turns to the iPhone guy and says, "She can't make fun of us anymore." Then he sodomizes the iPhone guy.

I'm pretty excited for this. This is unexpected. I always wondered what would happen if AT&T ever brought T-Mobile but I never thought it would happen. I hope this means better coverage and reliability. AT&T STILL has dead zones in outer New York city. On my commute from the city , if I happen to be on a phone call or on the Internet my call gets drooped and my Internet gets interrupted in the sane exact area, never fails.
The only thing I hope for is that AT&T and T-Mobile plans merge. Maybe have unlimited everything like Sprint does and Verizon doesn't. Im not sure about T-Mobile's plans but i know they're cheaper. I hope things like that change. Verizon has been buying companies left and right , I think this is a really big buy and positive move for AT&T.
I suppose the only downside is that this is going to take a year to come together. At first I thought it would happen before iPhone 5.
I predicted that T-Mobile will get the iPhone this summer. Cingular got the iPhone before it became AT&T so maybe T-Mobile will get it before it becomes AT&T.

ATT got some Verizon areas after their merger with Alltel. Due to government regulations, they had to sell some areas and ATT bought them.

Obi-Wan: "I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened."

So the bald, dumpy guy in the suit with all the money winds up sleeping with the hot chick.
There is a lesson here somewhere.

I'm really hoping for unlocked iPhones in the usa. Since we also know that future iPhones will be universal for both GSM and CDMA networks, and Verizon and now T-Mobile will have access to them in addition to AT&T, there should really be little reason left for locking phones. More carriers have them than not have them. I just want to be able to switch sim cards when I travel in Asia

I like that idea but i would really like it if they would go back to unlimited data plans at the same time because think about it if all those people are gonna get a service that's supposed to be better and get better service well people are gonna want smart phone and unlimited data and att will lose allot of money if they do not get there act together .. What they could do is they don't have to not offer it they could just give a data plan to customers then they tell there customers that if they want a data plan to give them there 200 MB or what ever and They should have unlimited but you have to ask for it that would be totally fair because allot of people are saying att is bad because of that huge main reason so they need to do something like my idea for instance .. I approve of this Message :-)

How long will it take t mobile to get an iphone, because i have an upgrade soon and i want an i phone 4 without having to buy a 600$ phone then jailbreak it for it to possible to use on my servie