There were rumors about AT&T being interested in acquiring T-Mobile USA a while ago. So it is not a surprise to see AT&T finally pulling the trigger on the move for $39B. Wireless subscribers in the U.S. are going to have one less option to choose from for their mobile service. The move makes AT&T the largest wireless provider in the nation. That is if the Federal government allows the deal to go through. AT&T not only will retire T-Mobile brand in the U.S., it will also cut jobs (as reported by Fox News):
The carriers would be able to make an estimated $40 billion in cost cuts, AT&T said. The moves would probably involve thousands of job losses; AT&T employs 267,000 people, while T-Mobile USA employs about 38,000.
The move is not just about subscribers. AT&T has had a very difficult time keeping up with the growth in wireless data usage. It has been criticized in the past for offering a less reliable service than some of its competitors. While this is not a done deal, considering the current landscape of this industry, it could enable AT&T to improve its quality of service and its 4G network offerings.
We have achieved the best solution for our company, our customers and shareholders. This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data. We will be able to focus more on the opportunities of a modern infrastructure in Germany and Europe, as well as in Internet products that accompanies to our strategy “fix, transform and innovate,
said René Obermann, CEO Deutsche Telekom. The deal seems to have worked out for both sides. AT&T needs to speed up its efforts to prepare its network for 4G revolution. Dealing with the government to get more spectrum opened up can take a few years.
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 combination will increase AT&T’s network density by approximately 30 percent in some of its most populated areas, while avoiding the need to construct additional cell towers.
So what about T-Mobile iPhone? The deal is not closed at this point. The company will remain independent for now. Once the deal gets a go ahead, it would not surprise us to see T-Mobile start offering iPhone 5.
Are you happy with AT&T buying T-Mobile?