Enterprise Mobility: ATandT, T-Mobile Deal Bad News for Android, Sprint, Phone Makers, Consumers
AT&T's $39 billion proposed purchase of Deutsche Telekom's T-Mobile USA roiled the wireless industry March 20, adding new heaping piles of labor onto the already immense workload of the U.S. Justice Department and Federal Communications Commission. AT&T wants T-Mobile to build out its 4G LTE (Long-Term Evolution) network for speedier access, the better to compete with Verizon Wireless, which is nipping at its heels in the smartphone market. Currently AT&T has 95.5 million subscribers, to Verizon's 94.1 million. This deal makes sense for AT&T, which offers a 4G smartphone with the Motorola Atrix 4G, but no 4G network to speak of. The buyout will allow AT&T to buy a large portion of the 4G network it needs to meet customer demand rather than build it all from scratch. T-Mobile, meanwhile, gets a bail-out, as does parent company Deutsche Telekom, which viewed its U.S. asset as something of a financial albatross after the carrier failed to deliver rapid subscriber growth. The timing of this merger is interesting. Regulators such as the DOJ are already consumed with ensuring Google doesn't co-opt the Internet search market. For example, the DOJ is mulling whether to sue to block Google's purchase of ITA Software for $700 million, but now the agency will be forced to take a hard look at a new, huge merger with greater industry ramifications. It looks like the AT&T acquisition of T-Mobile will be bad news for consumers; carriers such as Sprint; phone makers such as Samsung, RIM and Nokia; and Google's Android operating system. This eWEEK slide show illustrates why this buyout will be bad for the broader mobile industry.
T-Mobile Brand Dies
T-Mobile has some solid 3G phones, such as the myTouch 3G line, the Samsung Galaxy S Vibrant, the G2 (pictured here) and dozens more. Within a couple years, those phones will be useless as AT&T has pledged to repurpose T-Mobile's 3G infrastructure for its own 4G LTE designs. That will diminish the T-Mobile brand and potentially harm consumers.