AT&T to assimilate T-Mobile USA no comments
AT&T has announced that it has agreed to purchase T-Mobile USA for $39 billion in cash and stock from Deutsche Telekom.
Investors seem to like the deal. AT&T’s stock is up a bit on the news, though curiously not as much as Verizon’s. Perhaps this is because with fewer cellular service providers to compete with, Verizon would have greater pricing power. Besides consumers, the big looser from this deal appears to be Sprint Nextel, whose share price is down over 17 percent this morning.
Some of the benefits AT&T says it hopes to derive from the acquisition:
AT&T’s acquisition of T-Mobile USA provides an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term for both companies’ customers. In addition, it provides a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to meet the ongoing explosive demand for mobile broadband.
With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.” T-Mobile USA does not have a clear path to delivering LTE.
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”
Stephenson continued, “This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America.”
Adding T-Mobile’s resources could help improve the quality of AT&T’s service, but after my various experiences with the company I’m not buying it. Of course this deal still has to be approved by the relevant regulatory agencies, but if this marriage is consummated I expect it will be the consumer that ends up getting screwed.
