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When AT&T (NYSE:T) bid to buy T-Mobile March 20, large vendors were mum on the $39 billion deal that would unite the top U.S. wireless carrier with the No. 4 player in the market.
Chief among all of the reasons for triggering such a blockbuster deal is that AT&T needs T-Mobile’s fiber infrastructure and expertise to help accelerate its 4G LTE (Long-Term Evolution) network plans.
Thus began a barrage of back and forth, with politicians and pundits weighing in on whether this deal would harm or help the mobile market. Is it good for consumers? Is it good for competition?
Most Web service providers are on board with the deal. Microsoft (NASDAQ:MSFT), Facebook, Yahoo (NASDAQ:YHOO), Oracle (NASDAQ:ORCL), Research In Motion (NASDAQ:RIMM), and others announced their support for the acquisition in a letter to FCC Chairman Julius Genachowski June 6.
“Given the network capacity challenges, policymakers must give meaningful consideration to AT&T’s acquisition of T-Mobile as a means of addressing their near term wireless broadband capacity needs,” according to the companies.
“Such action will help to meet the near-term wireless broadband needs of consumers and ensure that we are globally competitive as the world increasingly embraces wireless broadband connectivity.”
Google wasn’t on the list of Internet powers blessing the deal. When eWEEK e-mailed the company to ask inquire about its position on the acquisition offer, a spokesperson fired back a terse statement: “We haven’t taken a position.”
Follow-up questions about whether it believed taking a position would harm its relationship with carriers and movers and shakers in the mobile market were summarily ignored.
As a formidable Internet power, the company’s absence from such a letter would have proved conspicuous four years ago, before the launch of the Google’s Android mobile operating system.
This is no longer the case. Google clearly doesn’t want to pick sides when it comes to carriers. Android is open source, so the vendor-neutral approach to carriers and device manufacturers is necessary for them to be successful.
Google’s goal with Android is to graft it into the mobile Internet fabric of the world at large. Voting to yes or no could have a deleterious impact on not only its relationship with Android supporters, and by extension, its mobile OS market share down the road.
Google Is Wise to Keep Quiet on Merger
Smaller mobile marketshare means few mobile searchers, which means fewer mobile ads served. That means less money for Google’s coffers.
Analysts agreed Google was wise not to weigh in.
Current Analysis analyst Avi Greengart said Google appreciates the rationale of the deal, which is that spectrum is scarce, T-Mobile was not viable on its own, and Google wants more advanced networks to ply its services.
“However, actually coming out in favor of the deal may be a step too far – diversity of carrier partners is also a desired outcome for Google, and consolidation works against that,” Greengart told eWEEK.
Industry analyst Jack Gold, who himself isn’t sure the merger helps consumers, said Google doesn’t want to to get involved in what it considers a non-strategic fight for them.
Android’s future is being threatened by the patent infringement lawsuit Oracle has brought to bear. Oracle accused Google of using Java code in Android without compensating Sun Microsystems, which Oracle acquired last year. Oracle is seeking billions in damages.
“Google has enough things to fight right now and they don’t need another battle on their hands,” Gold told eWEEK. “They have significant patent issues right now with Oracle over Java. And the carriers in Europe are pushing at them and in almost full rebellion (hence why the carriers are supporting the Windows Phone ambitions of Nokia as a third alternative that they can potentially control and increase their revenues). And Google is fighting a battle with Apple to gain market share and be No. 1.”
Moreover, Google wants to bolster its current mobile search ad offerings with local deals services and mobile payment apps such as Google Offers and Google Wallet, which will warrant carrier support, Gold added.
So there are plenty of reasons why Google is choosing to keep quiet about the AT&T-T-Mobile bid. One reason eWEEK believes Google would want to weigh in is that consolidating the nation’s top carriers providers fewer choices for consumers.
T-Mobile was Google’s first Android carrier partner and Android creator Andy Rubin has a soft spot for it. Sure, T-Mobile is struggling to keep, led alone add to, its current 30 million-plus wireless subscribers, but the company has tapped hardware makers to produce some very attractive Android smartphones.
T-Mobile even revitalized Rubin’s old baby from Danger, the Sidekick brand, as an Android handset. Despite AT&T’s assurances of seamless transitions for T-Mobile subscribers, there’s never any guarantee what will happen to T-Mobile phone users services.