This week AT&T announced that it would be acquiring T-Mobile U.S.A from Deutsche Telekom through a cash and stock transaction valued at roughly $39 billion, which would enable them to absorb the network and its nationwide wireless infrastructure, potentially resulting in a wide-scale 4G LTE rollout and larger coverage areas.
As two of only four major nationwide carriers, the acquisition has naturally become a cause for concern for T-Mobile's existing 46 million subscribers and the wireless consumer market as a whole. But what does the proposed acquisition actually mean?
While the news has been sensationalized by the media as a definitive acquisition, in reality this is only just the beginning of a long, arduous approval and integration process, which T-Mobile and AT&T have said will take up to 12 months to complete. Both AT&T's and T-Mobile's respective board of directors have approved the acquisition, but now the deal must clear regulatory committees from both the Federal Communications Commission and the Department of Justice, which will tasked with assessing whether or not the deal will serve the public interest and how it'll shape the competitive landscape. Though an outright rejection seems unlikely, it is a possible.
According to AT&T and T-Mobile, the acquisition will result in a larger, more robust nationwide 4G LTE network to 95-percent of the United States, a feat they say would otherwise be impossible. AT&T will transition all of T-Mobile's 3G towers to support 4G LTE, resulting in a presumably wider, more rapid rollout. However, integrating T-Mobile's infrastructure into AT&T's will be a difficult task that will take years to complete, and may take even longer to fully stabilize.
AT&T's acquisition of T-Mobile means one less provider in an already limited market, reducing the wireless landscape to three large scale providers and a handful of smaller providers servicing smaller markets, like Metro PCS and others. While AT&T has argued that these smaller competitors have grown exponentially in certain markets, they'll pose only a minor threat to the nationwide market. Moreover, some analysts believe that AT&T's T-Mobile acquisition could drive its main competitor, Verizon, to reinforce its own standing by making a play for Sprint, narrowing the market even further.
Though AT&T's absorption of T-Mobile will take years to complete, pending regulatory approval, it will eventually require subscribers to transition from T-Mobile to AT&T. Due to the discrepancies between AT&T and T-Mobile's wireless frequencies, subscribers may be required to replace their phones with those that are compatible with AT&T. Until that time, T-Mobile subscribers will retain the same service plans, hardware, and billing systems as they've always had, and the terms of any existing agreement will be honored even after acquisition is approved.
Sorry T-Mobile subscribers, the AT&T acquisition doesn't mean you can get an iPhone; at least, not yet. Though the two businesses will begin integrating their operations prior to their complete merger, only AT&T subscribers will have access to the iPhone. On a similar note, phones exclusive to T-Mobile won't be available to AT&T subscribers.
Though AT&T's acquisition of T-Mobile U.S.A. will have a huge impact on subscribers in the United States, the deal will have no bearing on the company's European operations. In other words, T-Mobile will remain a wholly independent provider in Germany, the United Kingdom, Poland, and other markets.