Enterprise Mobility: ATandT, T-Mobile Deal Bad News for Android, Sprint, Phone Makers, Consumers

 
 
By Clint Boulton  |  Posted 2011-03-25
 
 
 

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.

T-Mobile Brand Dies

Sprint Voices Concern

There is no silver lining in AT&T buying T-Mobile. Sprint, already the No. 3 U.S. carrier, will be dead last in the U.S. carrier market, with 50 million subscribers to AT&T's 130 million (assuming the 33.7 million T-Mobile subscribers) and Verizon's 94 million users. Sprint summed it up best March 21: "If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically integrated companies that control almost 80% of the U.S. wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete."

Sprint Voices Concern

Consumers Get Squeezed

Depending on whom you ask, the carriers live to serve consumers of mobile devices, services and applications. Often, the carriers act as if consumers serve them. Is the AT&T bid for T-Mobile an example of the latter philosophy? The evidence seems to say so. By consolidating the market to three top carriers in the U.S., AT&T is reducing choice. Moreover, who knows what new pricing schemes AT&T will cook up? It could jack up rates in the name of raised costs to deliver 4G services.

Consumers Get Squeezed

T-Mobile Early Android Supporter

The AT&T-T-Mobile tie would be a big hit to Google's Android platform. Sure it has launched on more than 100 smartphones and T-Mobile was a small carrier. But T-Mobile also got the Android ball rolling, launching the first couple Android smartphones-the G1 and myTouch 3G. T-Mobile later agreed to carry the failed Nexus One and the newer Nexus S for customers who wanted those phones on contract. T-Mobile currently has more than a dozen Android phones and tablets in its arsenal, with the Sidekick 4G and G2X 4G phones on the way. Google declined to comment, but losing a distribution partner is clearly not happy news.

T-Mobile Early Android Supporter

T-Mobile Backed Motorola Android Models

Motorola, which has battled back from the mobile doldrums with Android, is also losing a key distribution partner at a time when competition in the burgeoning smartphone market is as fierce as it's ever been. The Motorola Cliq from T-Mobile was popular early on.

T-Mobile Backed Motorola Android Models

Samsung Does Big Business on T-Mobile

Samsung offers plenty of phones on T-Mobile, including the Galaxy S Vibrant, Galaxy S 4G and Galaxy Tab tablet. How many consumers will feel comfortable buying these devices from T-Mobile given the uncertainty AT&T created?

Samsung Does Big Business on T-Mobile

Microsoft Loses a Windows Phone 7 Ally

We mentioned Android as a loser in this buyout, but what about Microsoft, which is struggling to help its Windows Phone 7 platform gain traction with the HTC smartphone line? Why would an OEM ship phones to a carrier on shaky ground?

Microsoft Loses a Windows Phone 7 Ally

RIM also Sells Smartphones on T-Mobile

We would also argue RIM is a loser here. Even though its sells more of its phones on Verizon Wireless, T-Mobile offers six Blackberry smartphones.

RIM also Sells Smartphones on T-Mobile

Verizon Gets Hurt Too

Speaking of Verizon, one could argue that being in the nonaggressor position for once will help the No. 2 carrier. It can feign indifference to the deal if passed, deny it wants to buy Sprint and boast of being the alternative no one hates if pressed. But it's still going to be about 35 million subscribers behind AT&T if the deal is consummated next year. What is good about going from a close No. 2 to a more distant No. 2?

Verizon Gets Hurt Too

Network Gear Makers Suffer

Om Malik brought up another good potential injured party from the deal: Alcatel-Lucent and its rivals. Malik wrote: "Alcatel-Lucent, along with Ericsson and Nokia Siemens, are suppliers of gear to both AT&T and T-Mobile USA. With a single customer, they will lose ability to control their own fate and are going to see their profits suffer as a result."

Network Gear Makers Suffer

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