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 industry.
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 T-Mobile.
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.
1. 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.
2. Another sale
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.
3. Outright closure
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, nonetheless.
4. 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.