T-Mobile Customers Will Lose Some Advantages
But this is not a win-win for everyone. T-Mobile customers will almost certainly lose those low prices they've come to enjoy. However, the successful prepaid business that T-Mobile built over the last few years will probably continue. It's unclear what will happen to T-Mobile's international roaming prices and the company's willingness to unlock a phone after 90 days into a contract. These were great features for travelers, but not something that most users care about, and I don't expect to see them continue.
Perhaps the worst news for customers is that AT&T, which has repeatedly been rated as having the lowest quality in customer service, is taking over the company with the best. While it's unlikely that T-Mobile's customer service culture will survive, perhaps AT&T will decide to clean up its act. Hey, it could happen.
But T-Mobile and its customers have other things to worry about. During the course of the approval process, T-Mobile won't be able to make any spectrum deals, including the one it has been talking to Clearwire about. It's unlikely that the company will be able to introduce any new phones that aren't already in the pipeline. T-Mobile will enter a state of suspended animation while U.S. antitrust regulators consider the situation. This could take a long time.
If the merger fails, T-Mobile will get something for its trouble. A couple billion dollars and a better roaming agreement with AT&T seem to be the top items. If the merger succeeds, T-Mobile customers will get vastly greater coverage, access to the iPhone and higher prices. AT&T customers will see better coverage, and given T-Mobile's apparent ability to operate a reliable network, perhaps fewer dropped calls.
In the longer term, competition will suffer. While T-Mobile may not be the biggest carrier around, it is the only real competitor in the GSM world that AT&T has in the United States. Competition will also suffer on a broader scale, since there will be two huge companies, and one-Sprint Nextel-that's not so huge.
It's unclear how long Sprint can last under this situation, especially given its somewhat shaky finances. Also suffering are all those thousands of former AT&T customers who got tired of the poor customer service, high prices and draconian policies and fled to T-Mobile, in some cases bringing their iPhones with them. To them this must seem like the nightmare that will never end.