AT&T to Buy T-Mobile USA for $39 Billion

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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 Buying T-Mobile USAAT&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.

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Comments

geoduck

Well,
There WERE those that said that T-Mobile was going to get the the iPhone…

Not quite what I was expecting.

mlvezie

I’d be surprised if the iPhone 5 wasn’t available for T-Mobile (or Sprint, for that matter).

Of course I’m a bit optimistic. My dad was with AT&T when, thanks to his location, he was summarily dropped by them. Only option he has is T-Mobile.

Although I can’t help but wonder if, after the sale, AT&T merges their networks somehow so that it won’t be necessary.

Lee Dronick

“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”

It is feasible to go the other way, use T-Mobile’s towers and add AT&T gear to them?

Last week here in San Diego AT&T announced that they were adding 35 towers in the city

daemon

T-mobile’s 3G towers are AWS (1700/2100), while AT&T doesn’t have a single handset that uses that band.

Lee Dronick

I need to clarify my post. I am sure that it is possible to put AT&T gear on T-Mobile towers, but would it be economically feasible for them to do that.

paikinho

T-mobile has an entire department of dedicated people who help get iPhones on their network. They use “Edge” for data as far as I last read, but I’m sure AT&T could sell a bunch more phones if they just sold iPhones which weren’t tied to AT&T’s network alone.

daemon

T-mobile has an entire department of dedicated people who help get iPhones on their network. They use ?Edge? for data as far as I last read, but I?m sure AT&T could sell a bunch more phones if they just sold iPhones which weren?t tied to AT&T?s network alone.

AT&T isn’t interested in selling phones, they’re interested in getting contracts. What’s in it for AT&T to sell a phone they’re not getting a contract on?

daemon

I am sure that it is possible to put AT&T gear on T-Mobile towers, but would it be economically feasible for them to do that.

Amplifier for 1900 and 850 cell phone broad casts.

I want you to notice something important. That amplifier is capable of handling two seperate frequencies, but still needs a different antena for each.

Now may be T-Mobile has dual band antennas, or may be not.

paikinho

AT&T isn?t interested in selling phones, they?re interested in getting contracts. What?s in it for AT&T to sell a phone they?re not getting a contract on?
———————
I wasn’t really responding to AT&T selling phones as much as the feasibility of the iPhone on T-mobiles existing existing network. Clearly people on T-mobile have been using unlocked iPhones since the iPhone came out, so feasibility question is answered.


What would be in it for AT&T?

Well locking more customers into a 2 year contract which you are speaking of would be one reason, which is all they could hope to do with their current customers as well.

Before I moved to where I live currently, I had been with T-mobile for more than 10 years. I was happily with t-mobile who had the best help service department I have seen in the mobile phone industry. Very helpful, very courteous….. something not seen in todays customer-service-as-a-commodity-and-afterthought market.

I always found T-mobiles coverage to be stellar, with fewer dropped calls. But when we moved to here, T-mobile is handled through a local partner and we were unable to retrieve our voicemail for some inane reason, so we now are with AT&T.

I had no contract with T-mobile at the time and hand’t had one for 9-10 years. I could chose to go where I pleased. We signed on with AT&T for the year and I have no complaints.

I bet that when you are thinking that AT&T is acquiring more contracts, you would be mostly mistaken with T-Mobile customers. AT&T isn’t acquiring 14 or so million contracts, but a company which happens to have a sizable customer base which they might be able to convince to sign up for contracts or they might not.

One way to make T-mobile customers stick, would be to sell them a new iPhone since they can’t currently get one which isn’t unlocked.

So yes ..... selling phones with lengthy contracts to current T-mobile customers hits AT&T’s sweet spot. AT&T would be interested in selling more iPhones. Not for the phones themselves, but to get more T-mobile customers under contract.

Why would you think that AT&T couldn’t sell their phones to T-mobile customers for a contract?

paikinho

Lack of iPhone is one reason DT is selling to AT&T:
“Deutsche Telekom specifically cited T-Mobile’s lack of the iPhone as a reason why the company’s US subsidiary’s performance was slumping last fall.

The Wall Street Journal noted that “consumers like T-Mobile but they also want to have the iPhone,” which at the time the Journal said that T-Mobile USA “has no chance of getting in the short term.”
————————
and….Both AT&T and T-mobile are building out the same type of HSPA+ service which will be supported in the iPhone 5. Coincidence? Perhaps, but the timing seems pretty convenient.

“AT&T will greatly bolster its ability to provide improved coverage now. It also accelerates its ability to roll out “4G” HSPA+ technology that Apple’s iPhone 5 is expected to support this summer, thanks to new Qualcomm MDM6600 baseband chip already in use in the Verizon iPhone 4 model, which latently supports HSPA+ and will expose functional support in the new AT&T model this summer.

Both AT&T and T-Mobile have already begun building out HSPA+, the latest generation of GSM/3GPP mobile networking supporting data speeds of up to 21Mbps (as some European carriers have been operating for years). Existing AT&T iPhone 4 models support 7Mbps data downloads, and HSPA+ networks can be backwardly compatible with them; new iPhone 5 models are expected to be able to take full advantage of the fast new network.

In comparison, Sprint’s WiMAX offers about 10Mbps, while existing AT&T and Verizon 3G service is closer to 1-2Mbps. Verizon’s new LTE data network tests at 40-50Mbps in the lab, but real throughput is closer to 5-12Mbps for downloads and uploads of 2-5Mbps. Neither WiMAX nor LTE currently offer significant coverage in the US.”

paikinho

The purchase kinda bums me out. I liked T-mobile for its customer service and the fact that they were open to basically customers doing what they wanted with there phones, whether iPhone or rooting an Android.

Now there will be less consumer choice.

RIP T-mobile.

RonMacGuy

Well, one thing is for sure: The T-Mobile ad campaign that makes AT&T look stupid is probably going to stop. Hope they keep the pretty girl, though!!

grin

Ross Edwards

“...It was as if millions of T-Mobile customers with jailbroken iPhones cried out in terror and were suddenly silenced…”

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