AT&T and T-Mobile took the tech world by complete surprise over the weekend with the announcement that AT&T plans to purchase its smaller rival for $39 billion. The acquisition will make AT&T the biggest wireless provider in the United States, and the only provider with a GSM-based network. But, there is a lot that needs to happen before T-Mobile will be officially swallowed up by AT&T.
While there may be some T-Mobile customers excited about the prospect of being able to get an iPhone, or AT&T customers hoping for broader, faster, or more reliable connectivity with the addition of the T-Mobile network resources, this merger will have to jump some regulatory hurdles just to be approved, and then there will be additional work to be done before either AT&T or T-Mobile customers will actually realize any benefits.
First, AT&T is going to have to get the blessing of agencies like the United States Federal Trade Commission (FTC), and Federal Communications Commission (FCC). There are obvious concerns of antitrust and inappropriate influence over the market when one company the size of AT&T controls so much of the wireless landscape, and offers the only GSM-based network choice.
Some customers and consumer advocacy groups are less than thrilled about the prospects of merging AT&T and T-Mobile. Andrew Jay Schwartzman, Senior Vice President and Policy Director of Media Access Project, claims, "If approved, this deal would further increase costs and decrease choices for the public," adding, "The possibility that three players would control nearly three-quarters of [the wireless] market will surely trigger intense scrutiny by [US regulatory] agencies."
Let's assume, though, that the acquisition eventually gets the green light from the FCC, FTC, and any other interested agencies. Despite the statement from Deutsche Telekom Chairman and CEO René Obermann declaring, "Most importantly, both AT&T and T-Mobile use the same network technology, which will make the integration seamless and produce significant benefits for customers," the reality is that it's not that simple.
It is true that AT&T and T-Mobile both use GSM-based mobile networks--as opposed to the CDMA networks employed by Verizon and Sprint. However, it is a stretch to say that the integration will be seamless. The 3G networks are on different frequency ranges--so, mobile devices from each will generally work with the rival network at the 2G level, but will be unable to connect to, or take advantage of the faster 3G or "4G" capabilities until or unless AT&T figures out how to actually combine the wireless networks.
The bottom line is that--although this news has us in shock today--the end result of the AT&T purchase of T-Mobile is probably at least a year away. If you are distraught about the prospects of the merger, don't panic just yet. And, if you are excited about combining AT&T and T-Mobile, don't hold your breath. It's going to take time.
And, AT&T--don't for a second think that this news has distracted me from the question of when you plan to drop the pretense of forcing me to have a different data plan for every possible use case and give me a pooled data plan with rollover megabytes. Just sayin'.