T-Mobile Takeover by AT&T Was Inevitable

Wayne Rash

For many, the announcement on March 20 that AT&T would buy T-Mobile USA was terrible news. The smallest of the four major carriers was known for superior customer service, low rates, and for launching the Android phone. As a result, the news is full of gloom and doom stories about how T-Mobile customers will end up being the losers in this transaction when it happens.

But the fact is that T-Mobile USA has been in a slow death spiral for a couple of years now. In a time when other carriers were growing rapidly, entering new markets, flooding consumers with new phones, T-Mobile was slowly losing subscribers, it had the highest churn in the business, and it was never able to build out its coverage area. While it might have had the fastest HSPA+ network, and it might have had the best customer service, it was hobbled by that poor coverage and by a lack of marketing support from its German parent, Deutsche Telekom.

The lack of marketing support was probably due to the fact that DT has been shopping for a buyer (or acquisition) for T-Mobile for some time. There were long talks with Sprint and there were talks with other carriers, not all of them in the U.S. But ultimately, AT&T made the decision to buy. From AT&T's viewpoint, this is a good deal. The company was facing a years-long effort to expand its network and even more years to fully move into LTE for really fast 4G communications.

By buying T-Mobile, AT&T adds more spectrum, it grows its cell network by about 30 percent, and it gets a partner with the same GSM technology. This means that as soon as the deal goes through, AT&T customers can access the T-Mobile cell sites, and T-Mobile customers get access to AT&T where they don't already have access (there are roaming agreements already in place between the two companies).

The result is better coverage for everyone. But this also means that AT&T can dramatically shorten the otherwise painful process of growing its network and instead can focus on bringing LTE to market. It also means that the spectrum from both companies will be available for 4G expansion, meaning that AT&T will have more flexibility.

But ultimately, some move like this was bound to happen. T-Mobile couldn't remain where it was, and a merger with Sprint would have meant years of painful conversion for customers. Either way, there would be adjustments by customers, but with the AT&T buy, at least existing T-Mobile customers can keep the phones they already have. In addition, AT&T customers can use the T-Mobile network. While the 3G and 4G frequencies aren't the same, ultimately new devices will emerge that use data networks from both companies. There's no question that rates will rise above what T-Mobile customers are currently paying, and some features that attract T-Mobile customers, such as Wi-Fi calling, and a liberal policy toward phone unlocking will probably vanish. But that probably would have happened eventually anyway.

While it's sad to see T-Mobile start to fade away, especially for those, like me, who are T-Mobile customers, it should be no surprise. One way or the other, T-Mobile's days were numbered. Now, at least, we know what that number is.

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Mar 22, 2011 4:03 PM Anonymous Anonymous  says:
We don't need ATT to get bigger. Remember the break-up? The idea was to create competition not to squelch it. If they merge, I'm going with one of the little guys. The nice thing about T-Mobile was that it wasn't all about money, well, like you said, that was too good to last. When decisions are based on money they're usually bad. Reply
Apr 1, 2011 11:04 PM gusto11071 gusto11071  says:
The reason a lot of people left AT&T was for their ever rising plans and horrible (I don't care about the customer)attitude. Don't get me wrong I love it's coverage. I had a signal in many places that others didn't. I actually have a unlocked iPhone running a Simple Mobile Sim card. EVERYTHING INCLUDED for $60.00 TALK TEXT WEB and have no complaints, YES, I do miss the 3G speed, but it was something I could give up for piece of mind. You see due to the 700MHZ 1800MHZ 2100MHZ band the iPhone only works on EDGE network. Technically now that the companies are going to be one, there will be no need to JAIL BREAK the iPhone anymore. All they need to do now is offer the iPhone on T-Mobile network NOW and that would add another million customers to AT&T before the merger is complete. ;-) Eventually everybody is going to be one happy family, paying HIGH fees for plans and switching from carrier to carrier. So, $60.00 per month sounds a lot better than $160.00 per month, right? Reply
May 1, 2011 3:05 PM Anonymous Anonymous  says:
I have hated AT&T for years. Horrible customer service, ridiculous rates, etc. Consumer Reports rated them in the bottom two carriers across the board (with Sprint; for phone, cellular, internet and satellite TV). I unbundled, canceled my internet, cut my home phone to bare bones/ $10 a month, now get Dish FROM Dish and upped my T-Mobile plan to unlimited talk/ text/ web for $80 a month. I've been happy. Now what? I'd rather stab out my own eyes with a rusty butter knife than have to deal with AT&T. I've already told T-Mobile that when the buy out happens I'm gone. They are not allowed to a) confirm the take over, give any kind of time frame. Verizon was rated in the top two with T-Mobile, but their plans are twice the price. There's a small region company in the Midwest called "Wow" that Consumer Reports rated the best all around, but will they ever grow? Sad times. Reply

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