AT&T buys T-mobile to create the new top dog in US wireless

AT&T buys T-mobile to create the new top dog in US wireless

Summary: On Sunday, Deutsche Telekom agreed to sell T-Mobile USA to AT&T for $39 billion, which will help AT&T create America's largest mobile phone provider, trumping Verizon Wireless.

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TOPICS: Mobility, Hardware, AT&T
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On Sunday, Deutsche Telekom agreed to sell its T-Mobile USA property to AT&T to help AT&T create America's largest mobile phone provider, trumping Verizon Wireless. The deal involves cash and stock and is currently valued at $39 billion.

The move also has larger global implications as Deutsche Telekom establishes a relationship with AT&T that makes the US provider a part of its global family of wireless carriers -- similar to how Verizon is connected to Vodafone. How's will work? Deutsche Telekom gets an executive seat on the AT&T board of directors and becomes a major shareholder in the company.

This move makes a lot more sense than the rumors earlier this month of Sprint buying T-Mobile. Even though both of those carriers needed a shot in the arm to compete with US wireless leaders AT&T and Verizon, the integration of the two companies would have been extremely difficult since both their 3G and 4G wireless networks are completely incompatible.

On the other hand, both AT&T and T-Mobile have similar GSM networks. Their 3G networks are based on different frequencies but both companies have been building faster networks based on HSPA+ so we should really look at this as a 4G move. The two companies have been badly trailing Verizon Wireless in 4G now that Verizon has aggressively begun rolling out LTE across the US. While HSPA+ isn't as fast or as robust as LTE, the combined HSPA+ networks of AT&T and T-Mobile will give them a larger footprint than Verizon's current LTE network.

Of course, integration still takes time - even for compatible networks. CNET's Maggie Reardon perfectly sums up the 4G challenges that lie ahead for AT&T in integrating T-Mobile (if the deal gets regulatory approval):

While it's true that T-Mobile and AT&T each use GSM technology, the carriers also use different bands of spectrum to deliver their services. Specifically, T-Mobile uses the spectrum it bought in the AWS spectrum auction in 2006 to build its 3G wireless network. AT&T also acquired spectrum in that auction. And it is using this AWS spectrum to build its LTE network. AT&T uses its 850MHz and 1900MHz spectrum to deliver its 3G service. Part of the reason that AT&T wanted T-Mobile in the first place was to get more of the AWS spectrum for its LTE network. Meanwhile, T-Mobile has no additional spectrum to deploy LTE, since it's been using the AWS spectrum for its 3G service. What this means is that once AT&T and T-Mobile merge, AT&T will have to move all of T-Mobile's existing 3G customers (which includes the supposed 4G HSPA+ customers) to AT&T's 850MHz and 1900MHz spectrum. This means T-Mobile customers will need new handsets, since the existing T-Mobile 3G HSPA and 4G HSPA+ handsets will no longer work on the AWS spectrum.

Meanwhile, Verizon is planning to upgrade its entire nationwide network to LTE by the end of 2013. This unexpected AT&T/T-Mobile tie-up could have the effect of accelerating the 4G race in the US, which would make the American 4G networks some of the best on the planet -- a reversal of fortune after the US fell behind Europe and Asia in 3G.

Note: We're likely to hear more about the AT&T/T-Mobile merger and its potential implications this week at the CTIA Wireless conference on Orlando. I'll be there covering it from beginning to end. You can read my posts here as well as follow me on Twitter for the latest updates from the conference.

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Topics: Mobility, Hardware, AT&T

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13 comments
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  • ATT is the WORST dog in the World

    I refuse to be an ATT customer. Its the WORST COMPANY from a customer stand point of view.

    Deuttsche Telelom sold us out! We should all leave TMobile asap. Unless you want to be charged extra for an inferior service.

    ATT provides the following benefits to its customers:

    -- A service so poor, that is not even allowed in third world countries
    -- You will pay dearly
    -- You wont be able to user your hotspot unless you pay up what ATT wants.
    -- Your Android cap will be limited to make iPhone look good so your speed will drop from 5K to 0.5K Mbps
    -- You stand a good chance of been overcharged without noticed for services you dont comsume.
    -- You will have to review your bill every month to see if its accurate.

    Advice to ALL TMobile customers, LEAVE while you can!
    Uralbas
    • Please clarify this statement:

      @Uralbas What is your basis for this:

      - A service so poor, that is not even allowed in third world countries
      otaddy
    • RE: AT&T buys T-mobile to create the new top dog in US wireless

      @Uralbas <br><br>My android does 3.5Mbps up and 1.5Mbps down...<br>If you are a customer of Sprint or Verizon then you also pay to tether.<br>Verizon has a deal that allows customers to do so for free for a limited time and sprint has charged their customers since last June.....unless you jailbreak your phone.<br>If you look at your bill and call when their is a problem then AT&T is the best at fixing things. Do not subscribe to 3rd party 'free' stuff.<br>You, as well, as any American consumer, has to be responsible and educated. Read up about stuff and just do not always reads blogs and posts and believe everything.<br>I live in a 90-100k city and get great service....
      networkdood
      • Rofl. I was an ATT customer

        And there were times I was overbilled. This happened continuously.<br><br>I got billed for calling countries I never knew off.<br><br>It would always be a hassle to get things off the record. Finally payed the contract off 350 dollars and left ATT. This is not what I read, this was my experience.<br><br>So no.. ATT is bad.<br><br>Now poor service. ATT while living in Green Bay WI I would have dropped calls everywhere. In Neenah WI at the intersection of 10 and 76 they never could sustain a signal. Even in the two least developed countries in America (Haiti and Bolivia) this is not allowed.<br><br>So please, forgive me when I say.... its the poorest service I ever had. This is not from hear say. This is from personal experience.<br><br>With TMobile my Android does 5.2Mbps download and 1.8Mbps upload. A Captivate with ATT service barely reaches 1.5Mbps. Same phone, different providers and ugly ATT service.
        Uralbas
    • TMob coverage is non-existant.

      @Uralbas

      I went 8 days and never entered a cell. 4 states. In 8 days. Never entered a cell.

      TMob is a joke of a network.
      Bruizer
  • RE: AT&T buys T-mobile to create the new top dog in US wireless

    This is depressing. After working so hard to break up monopolies, how is no one worried about how AT&T is taking over the cel.phone world again?

    We talk about choice, but internet options are becoming limited and AT&T has the funds to provide horrible service for more of a price. I better make sure that my T-mobile plan stays the same.
    norabean
  • RE: AT&T buys T-mobile to create the new top dog in US wireless

    Great! AT&T wireless has consolidated share by merging companies all over the country to create a one large CRAPPY company. Now we have one less competitor, and yet another tentacle to AT&T?s ever growing crappy network and an excuse to raise their prices while not improving their service. http://www.vaishwords.com/2010/11/rethinking-possible-with-at-wireless.html
    vaishwords
  • ATT was already torn apart once

    ATT was already torn apart once,why let them get that big again?
    Stan57
  • Prepare to be double billed, T-Mobile users

    It happened to me on all my accounts when they merged with SBC. I'll never get back the 20 hours I spent on the phone trying to get it straightened out.
    zmud
  • RE: AT&T buys T-mobile to create the new top dog in US wireless

    This is ridiculous. They are taking over and FCC should put a stop to this.
    santia58
  • Not T-Mobile! Noooooooo!

    I am concerned about the loss of T-Mobile's excellent plans and spectacular customer service. I have T-Mobile because I WANT T-Mobile. I am quite unhappy with this announcement.
    bblackmoor@...
  • RE: AT&T buys T-mobile to create the new top dog in US wireless

    Bummer, Liked T-Mobile and hated AT&T. I was just going to get a Samsung Tab with T-Mobiles data plan but now that will not happen. I will not go with AT&T again.
    Arcanha
  • I don't want to leave or move from T-Mobile!!

    I left Cingular for Nextel years ago for a 20% company discount. I have T-Mobile & switched about 3-4 years ago after leaving Nextel. Lets face it Nextel/Sprints coverage stinks. I did a lot of research & AT&T & Verizon were the 2 most expensive carriers at that time & still are. My company discount with Verizon isn't squat! I chose T-Mobile because of the price initially. I was floored when I found I had better coverage all over the USA. And the customer service has been awesome!! I got my dad to sign up with T-Mobile last year & several of my friends have them. I switched last year to a no contract unlimited plan when my Pet Sitting business picked up & am hoping I won't be very effected by the change. I just purchase my phone through a refurished website I've had a lot of success through & get my phones for VERY cheap. I was very upset to hear this news. How many more jobs will be lost due to this merger? I LOVE T-MOBILE!!

    PHONE: (847) 987-4322
    WEBSITE: http://www.shannonspetsitting.net/
    FACEBOOK: http://www.facebook.com/pages/Shannons-Pet-Sitting/213606610805
    TWITTER: http://twitter.com/ShannonPetSit
    ShannonsPetSitting