NEWS ANALYSIS: AT&T has dropped its bid for T-Mobile USA. And now, customers are in limbo as they await the company's future decision.
After months of battling competitors,
lawmakers, unions and countless other stakeholders, AT&T announced earlier this week it has abandoned its bid to acquire T-Mobile USA
from Deutsche Telekom in a deal valued at $39 billion. The political
environment for the deal was simply too much to justify fighting for the
acquisition, and judging by the Justice Department's negative response, it
seemed rather unlikely any agreement would have been approved.
For AT&T, the loss of T-Mobile USA
is something that can be solved with a check written to Deutsche Telekom for a few billion dollars
After that, the company will continue on as a dominant force in the wireless
But T-Mobile USA isn't so lucky.
Although the company will gladly use the AT&T cash to continue to fund
operations, it's still the small company in a land of giants. And all the
fallout from the deal could very well hurt the carrier's chances of even coming
close to staying competitive in the marketplace.
In addition Deutsche Telekom is still
looking to leave the U.S. wireless market. and that means ridding itself of
However, all this talk of AT&T and
T-Mobile misses one important stakeholder: the T-Mobile USA customers. What
will they do? How will they be affected? And perhaps most importantly, what can
be done to ensure they're still happy with whatever wireless service they use?
Read on to find out how the collapse of
the deal will impact T-Mobile customers.
Status quo-for now
Although changes will come, for now,
customers can expect their T-Mobile experience to be the same. In fact, T-Mobile
COO Jim Alling said in a Dec. 20 statement that the company is focused on
keeping up its same level of service. For now, that's a good thing for
customers. But it will change-and soon.
Although Deutsche Telekom couldn't make a deal happen with AT&T
the company could still try to unload T-Mobile USA in other ways. It could
break up the company and sell it off in pieces, or it could try to enter into
an agreement with some other firm. But it seems that Deutsche Telekom has no
choice but to sell T-Mobile and cut its losses. And customers who stick with
T-Mobile will need to play nice with another (likely smaller) carrier.
Of course, there's always a chance that
customers will have no choice but to go elsewhere if T-Mobile USA closes. It
was recently revealed that T-Mobile USA spends about $3 billion each year on
its many expenditures. And once that cash dries up-as expected-the company
might have no choice but to close. It's a long shot, but it's a possibility,
Time for the enterprise to go elsewhere
Corporate customers can't stand
uncertainty. Over the last several months, they've accepted uncertainty based
on the possibility of becoming an AT&T customer and getting better service.
But now that the deal is dead, there's nothing left for T-Mobile USA but to go
down in one way or another. And IT decision-makers will jump ship as soon as
possible because of that.