Verizon Should Resist the ATandT, T-Mobile Buyout: 10 Ways to Do It
News Analysis: AT&T is offering a boatload of cash to buy out T-Mobile. While Verizon has to fight back against the deal, it will have an uphill battle to try to block or outbid its giant rival.In a blockbuster move that could have serious ramifications on the wireless industry, AT&T announced on March 20 that it plans to acquire T-Mobile USA from Deutsche Telekom in a deal valued at about $39 billion. The combined company will have nearly 130 million subscribers if the deal is able to make its way through regulatory approval.
When AT&T announced its deal with T-Mobile USA, it was clear from the beginning that Verizon, AT&T's chief competitor, would be in for some trouble. For years now, the companies have been jockeying for first place in the U.S. wireless business, in terms of subscribers. And it's clear now that if AT&T secures T-Mobile USA, Verizon will have some serious work to do if it wants to catch up.
But that doesn't mean all is lost for Verizon. Quite the contrary. The company can do quite a bit to resist the T-Mobile acquisition and fight back against AT&T becoming a dominant force in the industry.
Read on to find out what it can do:
1. Take the fight to Congress
In order for AT&T to get its hands on T-Mobile, the company must get through regulatory approval that most believe will take a substantial amount of time. Over the next several months, Verizon must take its case to Congress and explain why it believes the merger between the companies is bad for consumers and the industry as a whole. It has significant clout in Washington, D.C. The time has come for Verizon to put that clout to good use to block this deal.
2. Make Apple see its point
So far, Apple hasn't said how it feels about AT&T trying to acquire T-Mobile. Since the beginning, AT&T and Apple have been close allies. But if AT&T secures T-Mobile, the company will have more leverage than ever. AT&T might use that leverage to impose its will on Apple. Considering Apple and Steve Jobs typically don't respond well to that, maybe Verizon can play the good guy with that company. As much as it might not like it, Verizon should be more willing to accept Apple's terms going forward. Such a response could make Apple view Verizon more favorably and possibly give it preferential treatment when new iPhones are launched. At this point, Verizon needs all the allies it can find.
3. Double down on Android
Google's Android platform has proved extremely successful on Verizon's network. But it's not the only carrier selling Android-based devices. All four carriers are. But after AT&T buys T-Mobile, Android handset makers will have only one GSM carrier to work with, which means they lose all their leverage if they want to offer a GSM device. If Verizon can find a way to use that to its advantage and offer more favorable terms to Android handset makers, the company might be able to solidify itself as the go-to carrier for Android devices. If it can do that, given Android's growth as of late, it might be able to close the subscriber gap against the greatly enlarged post-merger AT&T.
4. Speak to the consumers
In an industry where there are few companies competing for consumers already, consolidation usually doesn't bode well for customers. Realizing that, Verizon should try to take its message to consumers to get them to rebel against the AT&T-T-Mobile USA deal. Moreover, if the deal goes through, Verizon should make itself look like the victim, the "good" force against the "evil" giant. In most cases, consumers respond well to that.