What Does the Death of the AT&T/T-Mobile Deal Mean to You?
As we detailed earlier, the AT&T/T-Mobile deal is dead, bringing cheers and moans from both sides of the issue.
T-Mobile’s owner, Deutsche Telekom, didn’t want to sink more money into T-Mobile and was trying to find potential buyers for their US interests. Sprint reportedly put their name in the hat, but talks fell through due to what was likely differences in technology (CMDA vs. GSM). AT&T, it seemed, was the most logical carrier to acquire T-Mobile since both are based on GSM.
The merger was supposed to give AT&T the spectrum and frequencies needed to address their growing user-base, and roll T-Mobile’s customers into their flock. Apparently Deutsche Telekom knew it would be a hard-sell to the US regulatory bodies, and a multi-billion dollar failure clause was written into the contract.
Now that the deal has failed, AT&T must fork over US$4-billion to T-Mobile — a much needed infusion for T-Mobile, but a big hit to AT&T.
What does all of this mean to you?
If you’re a T-Mobile customer, it means you’ll likely be seeing the same level of service and speeds that you’ve been seeing for some time into the future. Don’t get too cozy, it’s likely that Deutsche Telekom will still want to find another (probably smaller) buyer for T-Mobile sometime in the coming years.
If you’re an AT&T customer, according to your carrier, you’re already hurting for bandwidth and your service is likely going to suffer. We’re not so sure about that, and suspect you won’t see much of a change in your service or speeds.
Is there any good news in all of this?
Yes! Luckily there is a silver lining! Since AT&T and T-Mobile make up the majority of GSM/HSPA+ coverage across the US, had the two combined it would have essentially made for a GSM monopoly. Some have argued that Verizon and Sprint (both CDMA carriers) would have been left with no option but to combine so they’d be able to compete with the new GSM playing field. This would have made a CDMA monopoly, and limited carrier choice in the US to one of two major carriers — not good for competition, or for prices.
Also, AT&T will enter a “mutually beneficial” roaming agreement with T-Mobile, which should open up spectrum and bandwidth for customers from both carriers. Unfortunately, most handsets in the US are provided by the carriers themselves and are limited to the frequencies of that carrier, making roaming (especially data) impractical (at least at full-speeds).
Some handsets, like the GSM variety of the Galaxy Nexus, have a pentaband radio, and are able to work at full-speed on virtually any carrier in the world (including 4G HSPA+ from both T-Mobile and AT&T). Hopefully we’ll see more “universal” handsets offered by carriers (though we’re not holding our breath). More likely we’ll start to see high-end handsets from both carriers begin to come equipped with radios that can take advantage of the new roaming agreement.