AT&T’s $39 billion offer for T-Mobile is a blockbuster attempt at building the largest wireless carrier in the US. The deal faces both FCC and Justice Department regulatory review and, from all reports, it’s hardly a guaranteed deal. AT&T has to be very confident, however, as it stands to lose $3 billion plus the priceless wireless spectrum to T-Mobile if it fails to convince regulators that this merger is a good thing.
Parts of the press release sure make it sound like a good idea:
AT&T’s acquisition of T-Mobile USA provides an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term for both companies’ customers. In addition, it provides a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to meet the ongoing explosive demand for mobile broadband.
With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.” T-Mobile USA does not have a clear path to delivering LTE.
One item not mentioned in the release, or in much follow up news, is the potential impact of the acquisition on Isis, the mobile operator payment network now in the gestation phase. Isis was formed by AT&T, Verizon Wireless, and T-Mobile. The AT&T/T-Mo merger might upset the joint venture’s likely delicate balance of interests. No doubt we’ll hear from Isis and its mobile operator parents shortly.
