AT&T announced on Sunday that it plans to buy T-Mobile USA from Deutsche Telekom for some US$39 billion in cash and stock. The deal has already been approved by the Board of Directors from both companies, and is expected to be completed in about 12 months.
Once completed, AT&T will have all of T-Mobile customers and radio frequencies in the United States under its wing, increasing the overall coverage areas the carrier can claim. According to AT&T, the deal will “provide an optimal combination of network assets to add capacity sooner than any alternative, as well as provide an opportunity to improve network quality in the near term for both companies’ customers.”
AT&T ponies up for T-Mobile USA
AT&T expects the deal will also help it ramp up its LTE service plans, which should put the company in a better competitive position against Verizon. “AT&T and T-Mobile USA customers will see service improvements — including improved voice quality - as a result of additional spectrum, increased cell tower density and broader network infrastructure,” AT&T said. “At closing, AT&T will immediately gain cell sites equivalent to what would have taken on average five years to build without the transaction, and double that in some markets.”
The combined AT&T and T-Mobile subscriber base should also make AT&T the single largest cell service provider in the country.
AT&T will be paying Deutsche Telekom $25 billion in cash with the remainder of the balance coming in the form of AT&T common stock. The deal still must work its way through the standard regulatory approval process, too.
Don’t expect, however, the deal to bring the iPhone to T-Mobile’s network any sooner even though it uses GSM technology, just like AT&T because Apple’s combination iPod and smartphone doesn’t include some of the necessary frequencies to send data over the carrier’s 3G frequencies. Assuming T-Mobile does start offering the iPhone in the near future, it more likely will come from a product redesign that adds in the extra 3G data frequencies.