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.
No iPhone but Plenty of Propaganda
5. No iPhone
In the United States, T-Mobile USA is the only company that doesn’t offer the iPhone. If the AT&T deal had been approved, that would have changed. But now that AT&T has walked away, T-Mobile customers can all but be guaranteed that they won’t have access to Apple’s iPhone. For Apple, there’s not enough upside to offer the smartphone to the small number of T-Mobile customers.
6. Propaganda galore
Over the next several weeks, T–Mobile customers will be inundated with propaganda from the company. The carrier will be desperate to keep customers, and it’ll do everything to show a unified, strong front. The only issue is that most consumers know all too well that there is a soft underbelly at T-Mobile that is becoming more exposed.
7. Plan changes
As noted, T-Mobile is in a bit of a cash conundrum right now. And it would appear that the best way for the company to at least mitigate those issues is to institute some changes to plans that help it generate more revenue. Of course, generating more revenue means costing customers more cash. So, those who want to stick with T-Mobile might have no choice but to pay more in the coming months.
8. The lure of AT&T
Although AT&T tried to acquire T-Mobile USA, don’t have any false belief that the company will play nice with the carrier from here on out. AT&T knows that T-Mobile is in trouble, and it likely won’t take long for it to develop programs and other offers to lure customers to its side. In the coming weeks, T-Mobile customers might just find themselves at AT&T because of the great deals they’ve been offered to switch.
9. Indefinite uncertainty
As noted, uncertainty is a real problem for T-Mobile right now. But it becomes even worse to both consumers and enterprise users when they realize that the uncertainty is going to last for an indefinite period of time. There’s no quick fix for T-Mobile.
10. Fewer high-quality phone options
All this talk of T-Mobile troubles fails to point out one major issue for the carrier: Handset makers might be less willing in the coming months to offer their top-of-the-line devices on the company’s service. After all, if it has the least number of customers, and those folks are leaving in droves, why should they offer their best devices to them? Look for T-Mobile to quickly become the land of subpar phones.