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AT&T and T-Mobile again remind us of why we should grateful their merger collapsed

August 23rd, 2012 at 9:40 AM

It wasn’t that long ago when American wireless subscribers seemed resigned to the fact that AT&T (T) was going to gobble up T-Mobile and that Sprint (S) would likely be bought up by Verizon (VZ) shortly after, thus dooming us all to live under a wireless duopoly. But then something happened: The government decided that an AT&T/T-Mobile merger would consolidate the wireless industry too much and moved to block it. And since then, there have been some encouraging signs that the U.S. wireless market may be getting more, rather than less, competitive.

The biggest thing that has happened to improve the competitive landscape is that T-Mobile has now finally acquired enough spectrum to build out a nationwide 4G LTE network. Before the AT&T merger died off, T-Mobile didn’t have nearly enough spectrum to remain competitive with its rivals in the LTE space, which was a big reason why parent company Deutsche Telekom wanted to sell it to AT&T in the first place: if T-Mobile was doomed as a national carrier anyway, Deutsche figured it might as well get some money for the carrier while it still could.

But then AT&T had to fork over 7MHz of valuable AWS spectrum to T-Mobile as compensation for the failed merger and T-Mobile was suddenly in business. Things got even better for the nation’s No.4 carrier when it subsequently agreed to swap some spectrum with Verizon that will give it access to an estimated 60 million new potential subscribers in the United States.

All of which brings us to T-Mobile’s announcement on Wednesday that it would be bringing back old-fashioned, non-throttled unlimited data plans starting at the extremely reasonable price of $20 a month. This means that two of the country’s four major wireless carriers, along with some smaller budget carriers such as MetroPCS (PCS), are now offering unlimited smartphone data plans that could put pressure on AT&T and Verizon to either offer more data in their capped plans or perhaps even scrap data caps all together.

Now, can you imagine any of these positive developments occurring if AT&T had managed to acquire T-Mobile? No. And what’s worse, we’d be looking at a situation where T-Mobile would have adopted AT&T’s most annoying practices and policies including its fee-extracting data caps, its restrictions on using its wireless network for preloaded apps such as FaceTime, and its general whining that greedy smartphone users are putting far too much strain on its delicate flower of a wireless network.

So as you sit down this fall to figure out which carrier you’ll use for your new iPhone, Galaxy Nexus, Windows Phone 8 device or whatever, be thankful that you still have four national wireless operators to choose from. Because as AT&T and T-Mobile’s recent decisions have shown, we really dodged a bullet when their merger fell apart.




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