Mobile Broadband – Google NewsAT&T’s T-Mobile Buyout. Is It Good or Bad?
AT&T’s T-Mobile Buyout
As AT&T’s buyout bid for T-Mobile drags on more and more information is becoming available on the specifics. Whether you’re a supporter of the buyout or not one thing you will have to admit is that it will reduce choices for the consumer. The T-Mobile buyout will eliminate 25% of the competition from the market and can in no way be construed as expanding consumer choice.
AT&T claims that by gobbling up T-Mobile it will acquire much needed bandwidth and be able to provide 4G services to 97% of the country. The part of the country that isn’t currently covered is mostly rural areas, so it’s easy to understand how folks in these areas are all for the T-Mobile buyout. The problem is that everything AT&T states as fact may not necessarily be true.
AT&T has stated that people will be able to keep their current T-Mobile plan after the sale has been made, even if they decide to change devices. The catch is that most folks will have switched plans by 2015, which means that they will begin to pay whatever AT&T is asking or switch to Verizon or Sprint. Remember T-Mobile is known for providing lower cost plans.
According to an article from the Denver Post Sprint’s Vice President for Government Affairs, Larry Krevor claims that AT&T has 40 plus megahertz of spectrum that they are not presently using, negating their bandwidth claims. This may all be sour grapes though, since Sprint had expressed an interest in purchasing T-Mobile as well before the 39 billion dollar bid. On the face of it though, it does appear like this is more about eliminating a competitor as opposed to providing better service and acquiring bandwidth.
Adding to AT&T’s credibility troubles is the fact that their lawyers inadvertently released a document that showed AT&T could easily expand 4G coverage to 97% of the country for a mere $3.8 billion dollars as opposed to the $39 billion that they are offering for T-Mobile.
Although the Justice Dept. and the FCC are scheduled to release their ruling on this merger by the end of this year (2011) it could very well be extended into next year if things get dicey. Justice and the FCC may just say no way to this reduction in competition, but I doubt it.
The chances are though that T-Mobile’s parent company Deutsche Telekom AG will sell T-Mobile anyway, but just not to AT&T. So even if Justice says no the T-Mobile Buyout probably will continue, but only to another suitor.
