T-Mobile Customers Should Worry About ATandT Deal: Consumer Reports

A Consumer Reports study found little good news for T-Mobile customers, should AT&T's proposed purchase be approved. The first Senate hearing on the matter is set for May 11.

Consumer Reports has more bad news for T-Mobile customers already fearing what AT&T's proposed purchase of their carrier might mean for them.

Following a survey with more than 50,000 subscriber participants last fall, the publication determined that the sale of T-Mobile to AT&T could be a "setback" for T-Mobile customers. The worry is that T-Mobile's service would come to resemble AT&T's, rather than the reverse.

"Our survey data finds precious little to cheer T-Mobile customers about the proposed merger," Paul Reynolds wrote in an April 11 blog post on the publication's site, "or to clearly support the expected pitch from AT&T that the proposed takeover of its smaller competitor will improve service for current customers of both AT&T and T-Mobile."

Regarding contract service, T-Mobile's was found to be "meaningfully better" than AT&T's, and AT&T received lower marks than T-Mobile on nearly every attribute Consumer Reports rated for. In regard to prepaid service, T-Mobile's Go Phone brand actually outranked offerings from Verizon, Virgin and AT&T, with only Tracfone and Consumer Cellular beating it.

In almost all cities, T-Mobile's network was also found to be more satisfying than AT&T's. In 20 of the 21 cities where Consumer Reports said it had sufficient data to rate both carriers, "T-Mobile had notably fewer problems with dropped calls than AT&T."

But AT&T's biggest problem, Consumer Reports found-noting that it was the area where customers' satisfaction rates showed the biggest gap-was customer service.

"From support on various modes (phone, email, website) to success in solving problems ... and staff knowledge," AT&T's customer service, wrote the pub, was "sub-par."

While T-Mobile is hardly perfect-regarding issues with network service, AT&T and T-Mobile were said to be "evenly matched," with each rating average or worse compared with other carriers-its national reader score has remained stable. AT&T's, however, has slid, with customers increasingly considering a move to another carrier. AT&T has "become markedly less satisfactory to readers in resolving issues and has prompted a startling jump (of a full 13 percentage points) in the proportion of its customers who say they want to quit the carrier," Reynolds wrote.

When asked whether an issue had been satisfactorily resolved, 70 percent of T-Mobile customers said yes in 2009, and in 2010 71 percent said the same. When the question was posted to AT&T customers, 63 said yes in 2009, but only 58 percent said the same in 2010. When asked if they were seriously considering switching carriers, 37 percent of T-Mobile customers said each year, while among AT&T customers, 33 percent said yes in 2009 and 46 percent said yes in 2010. (It's worth noting that there were strong rumors of a pending Verizon Wireless iPhone at the time, which may have contributed to the increase in those considering a switch. However, had they been satisfied, would a Verizon iPhone have been such a lure?)

For now, however, T-Mobile customers can expect more of the same. Federal regulators still need to approve the proposed $39 billion purchase-a process that many estimate will take nearly a year, and that the Federal Communications Commission has said it will consider slowly and carefully.

The first Senate hearing on the matter has been scheduled for May 11 by Sen. Herb Kohl, D-Wisc., chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Following AT&T's March 20 announcement of its intention to buy T-Mobile, a move that would create by far the largest carrier in the United States, Kohl said he worried what the purchase would ultimately mean for American consumers.

"Consumers have borne the brunt of the increasingly concentrated market for mobile phone service. The explosion of cell phone usage-especially smartphones-makes competition in this market more important than ever as a check on prices, consumer choice, and service," he said in a statement the same day. "That's why the Antitrust Subcommittee will take a close look at what this loss of competition will mean for people who increasingly rely on wireless phone service to connect to friends, family and the Internet."