AT&T used to be a shining star in the wireless industry. It had the iPhone exclusively. It had a sturdy 3G network that in most cases was faster than the 3G networks of Verizon and Sprint. It had a parade of hot smartphone releases from the BlackJack to the Tilt to the Focus right through to the Inspire 4G and Atrix 4G.
Lately, AT&T has fallen on tough times. They’ve been heavily criticized for advertising a 4G HSPA+ network that doesn’t exist. They’re far behind Verizon and Sprint in the race to 4G, and T-Mobile’s HSPA+ network is nearly ubiquitous, providing impressive download and upload speeds without LTE or WiMax. They’ve lost exclusivity to the iPhone in the US. They’re no longer the number one carrier in the US by subscriber count. They’re still plagued with network issues that make it impossible to make phone calls or check emails at times in highly populated areas like New York, San Fransisco, and Las Vegas.
AT&T’s drastic move to buy T-Mobile for $39 billion couldn’t have come at a better time. The possibility still remains that government agencies won’t approve the merger, since it will create an effective monopoly for GSM carriers in the US.
Given regulatory approval, what does this mean for you, the wireless consumer?
First, we know that eventually, the companies will combine their 2G and 3G network. That doesn’t really mean anything for people with existing phones, because either your phone can use T-Mobile’s AWS/2100MHz network or AT&T’s 850/1900MHz network. Future phones are likely to combine these bands to offer you access to literally both T-Mobile and AT&T cell phone towers, which will provide a pretty huge bump in reliability. With such a phone, you’re likely to get full bars in most places. Yes: even New York, San Fransisco, and other densely populated areas. More reliable call service and cellular data is good for the consumer.
Second, this will help the combined companies deploy their 4G roll out more quickly. We already know that AT&T had planned on stepping out its LTE network in 2011, with a wide deployment in 2012. T-Mobile, on the other hand, doesn’t really have concrete plans to do LTE. With the combined network, AT&T will utilize T-Mobile’s ubiquitous AWS frequency to achieve fast penetration of their LTE network when they flip the switch. This will allow them to play catch up to Verizon a lot faster. More 4G is good for the consumer.
Third, the T-Mobile brand is likely to continue to exist for a while. Whether the brand eventually gets phased out is unknown, but one thing is for sure: T-Mobiles phone franchises like the Sidekick, myTouch, and the G series aren’t going away. In fact, AT&T is lacking any strong phone franchise (think Droid on Verizon and EVO on Sprint), so expect to see future AT&T/T-Mobile smartphones fall under one of these three bands. Strong phone franchises are good for consumers because the parent company feels compelled to issue new devices often to keep the line fresh. More devices means faster innovation.
Fourth, the combined AT&T/T-Mobile will push prices down in the industry. As the largest carrier in the US, the company will have huge buying power when it goes up against HTC, LG, Samsung, Motorola, and the rest. This pricing power will undoubtedly be transferred to the price you pay on new equipment, plus your monthly bill. Cheaper prices are good for the consumer.
Overall, this is a big win for you. Unless, of course, the combined company is so large that their lack of agility makes them unable to compete against Sprint and Verizon. But we have faith in AT&T’s ability to run the largest wireless provided in the country. They’ve done it before, and soon, they’re going to do it again.
Further reading: AT&T/T-Mobile Merger Deck