In proposed merger with AT&T, T-Mobile customers win

By on Mar 21, 2011 at 11:20 AM
mobile March 21, 2011

While AT&T customers can clearly see the benefits of a merger with T-Mobile, customers of the company being acquired are having a difficult time seeing what’s in it for them. What will happen to T-Mobile’s current data plan offerings? Will handset releases slow down? How will this effect my monthly bill? The questions are plentiful and, unfortunately, many of them are unanswered at this point. Yet while the questions outnumber the answers, there is one thing I’m pretty certain of: whether this deal goes through or not, T-Mobile customers are going to benefit.

When you look at the AT&T, T-Mobile deal from a very high level, it looks like a disaster for customers of the latter company. AT&T, a carrier with higher plan prices and more money, swallowing up a smaller rival with more competitive rate plans and an impeccable customer service record. The company that was once dissolved into pieces for its market monopoly in 1982, is slowly beginning to put the franchise back together.

It’s only when you start to really dig into the terms of the agreement that you begin to realize what this deal actually means for T-Mobile and its customers. And how, if the deal were to be denied by U.S. regulators or scuttled by AT&T, there is still something in it for T-Mobile consumers. No matter which way the regulatory ball falls, T-Mobile’s customers win.

The terms of the deal are still very liquid, but a preliminary agreement has been announced by both parties. In exchange for $39 billion in cash and stock, AT&T will acquire T-Mobile and, more importantly, its portfolio of spectrum licenses. If approved, AT&T will take most of T-Mobile’s AWS spectrum and repurpose it for its future LTE rollout. A rollout that, if all goes according to plan, will blanket 95% of the population in the continental U.S. with sweet, sweet Long Term Evolution radio waves. AT&T will also assume control of T-Mobile’s network infrastructure, giving the company access to more towers and equipment in locations across the country. The combination of increased spectrum and networking equipment is expected to ease cellular-data bottlenecks that are very familiar to those who frequent major metropolitan areas like New York and San Francisco with AT&T devices. The hordes of T-Mobile customers — all 33.7 million of them — will be folded into AT&T and benefit from these investments and divestments as well.

But what if the deal falls through? What if U.S. regulators squash the deal or AT&T finds the nearly $40 billion premium too hefty? T-Mobile customers, and Deutsche Telekom,  will still make out just fine. In a conference call this morning, AT&T announced that if the merger is unsuccessful, it will pay T-Mobile USA $3 billion for its troubles. But it doesn’t stop there. AT&T will transfer to T-Mobile any of its AWS spectrum that is “not critical” to its initial LTE rollout and enter a roaming agreement with the carrier that will give it coverage in areas where T-Mobile does not overlap with AT&T. Again, T-Mobile customers will benefit from more spectrum and more coverage.

The big question that most T-Mobile customers will have — especially those who don’t know or care what “spectrum” is — will be, “will my monthly wireless bill increase?” And those are answers we may not have have until long after the deal is done. In the meantime, what I can tell the T-Mobile faithful is this: whether the deal goes through or not, you will definitely win from a network prospective.

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  • Gusto395

    All I know is that with AT&T I had a lot of dropped calls and a lot of “DEAD SPOTS” in NYC, on my commute home (60 miles north of NYC) I always had a dropped call in a particular area, not with T-Mobile! The best customer service in over 20 years, I had them all, From “Cellular One” to “Voice Stream” and also “Nextel” and “Sprint” too, from all my carriers, the best coverage was “Verizon” but too many hidden fees and not very friendly customer service. I get the best of both worlds with T-Mobile, excellent customer service and the best coverage in a mobile phone in 20 years. If or should I say when this merger goes through I hope that AT&T keep their end of the bargain and NOT raise my monthly rate plan.

  • Gusto395

    Oh, I forgot to mention there is no LTE on GSM , not yet anyway. HSPA/UMTS technology (High Speed Packet Access/Universal Mobile Telephone System) is 3G and the HSPA + that T-Mobile uses is very fast too. But the FULL 4G is LTE which stands for Long Term Evolution. Now with the FULL Spectrum on LTE, I can only imagine how fast our downloads will be on our handsets, WOW! So just to keep everyone on the same page 4G HSPA+ is fast right now and is the fastest you can get on GSM in the USA. So when AT&T roll out the FULL 4G LTE in a as little as in the next 8 months with T-Mobile’s aquired spectrum, I think that it will cover as much as 98% of the USA. That is a win+win situation for AT&T and T-Mobile customers. just keep my rate plan the same. ;0)

  • b*tching people

    how you all cry…. no one keeps you with any company and there are various companies to choose from . stop being cheap . if you want unlimted talk , txt , and web you got to pay . what do you all watn all that for free or 30 bucks.. god all this b*tching makes me sick. just deal with it people . the company have a right to do business and choose there prices. its your decision to stay or leave and wether or not you have web so you can get on face book and try to hook up with some hot chick or guy .. stop complaining people no once keeps you to what service you have ..

  • Anonymous

    If the merger goes through, then AT&T will have a monopoly on worldwide phones available in the US. That’s not something any other country in the world has to endure.

  • Grammatica di Polizia

    LOL… you people don’t know what you are talking about.

    Even T-Mobile on its site said that on the acquisition being approved, existing contracts extinguish and it’s in AT&T’s court to decide what deals it will offer T-Mobile customers.

    Even handsets people are buying at T-Mobile are in jeopardy of being bricked on the acquisition. And T-Mobile and AT&T have been careful to not say what will happen to the phones when the deal is concluded. AT&T said “we will take care of any customer who agrees to sign on with AT&T.” Most experts say that what AT&T means is it will give a $100 credit toward the purchase of an AT&T phone. If you don’t sign on with AT&T, you are SOL. Your phone is bricked and you can’t even sell it on eBay.

    Lastly, the parties are acting as the law dictates. When there’s a change in providers of a service, the contracting parties contract with the old company is extinguished. (That’s why all this grandfather talk is so stupid. Clearly you don’t know how things really work. Besides “grandfathered plans” is a term the carriers have never used. It’s only fantasy talk stared by some online trolls a few years back, attaching a label to the carrier making a non-binding decision to keep one’s plan in place.)

    To confirm all this, look at your terms of service. Notice that you give the carrier the absolute right to modify your plan from date of notice forward, including up to canceling your account. Also notice there’s no use of the word “grandfathered plans” nor even the concept.

    You might want to say “But I signed a two year contract. That’s true, you did. But have you read the entire contract, including what I just said. The contract, in return for discounting your phone purchase, requires YOU to stay with the carrier for two years. Your agreement is not based on your agreeing to service, it’s for the phone discount.

    That’s why if you quit the contract early you do NOT owe the carrier for the remaining service months you will not be using. You pay an ETF based on your getting the discounted phone. In other words, that’s why the ETF is $300, for example, instead of $2000, for example, if that’s the money you would have paid had you stayed for two years.

    By the way, AT&T has caculated that 7.5 to 8 million T-Mobile customers will choose not to switch to AT&T and has in its comments to investors that the Company has accounted for that loss.

    AT&T is also allocating in the $39 billion the cost of acquiring T-Mobile phones and getting people who switch to AT&T. (IMHO since AT&T does not want the T-Mobile cheapskate customers, nor those other than the high-end customers, ones with multiple lines or who pay $150+ for services. The cream of the subscriber crop, so to speak. With that in mind, that’s where I came up with the $100 value AT&T credit for the T-Mobile customers superphone, not cash, but a credit. And the customer has to turn in the phone.)

  • Winski

    Since you can’t, won’t or have chosen to change the subject, regarding the PRICE us loyal and highly abused t-mumble customers may pay for this circle-jerk proposed merger ….. Any way you cut it – we’re hosed… If it goes thru…prices go up … If not … Prices go up… AND if you’re dumb enough to re-up with any carrier on a two-year slave contract … You’re price is going up….. Pay-as-you-go is all that’s left for rational prices …. OR nothing at all….

    • Winski

      It will be so much fun to tell BOTH to jam it up their a** ……..

  • http://www.facebook.com/people/Terrin-Bell/690507487 Terrin Bell

    What BS. How does any consumer benefit from LESS competition? The answer is very simple. They don’t. Further, I am on T-Mobile because after using both AT&T and Verizon, I decided they both are horrible companies.

    T-Mobile has 1) better customer service, and 2) more competitive plan affordable options. The only time, I have experienced a dropped call is when talking to somebody on AT&T.

    The last thing we need is to make AT&T richer.

  • http://twitter.com/androidhelpers Android Helpers

    If this goes through, 2012 will be the year of prepaid.

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