In the midst of the 3G/4G advertisement confusion of T-Mobile lying about their network and AT&T following suit, this news just added to the craziness surrounding the two companies. AT&T has purchased T-Mobile USA from Deutsche Telekom for $39 billion, $25b in cash and $14b in stocks and bonds. This gives DT a stake in AT&T of 8% after the dust will inevitably clear.
This has happened because, as we have talked about on our show in the past, a foreign company cannot own more than 10% of a US-based company that owns or operates wireless spectrum. The FCC gave T-Mobile and DT a deadline to meet and they decided to sell off the T-Mobile USA brand today.
The acquisition will give 130 million customers nationwide to this new beast of a network, once it goes through the routine regulation board approvals and government checks. AT&T says it will take about 12 months to move through the entire ordeal and once completed, will become the only GSM carrier in the States.
Does this mean T-Mobile will get the iPhone? For more on this breaking news, including a press release, video from the chairman of AT&T, PDF factsheets, and how this affects you, click the break.
First, this purchase is more similar to the Sprint and Nextel purchase than it is the Verizon and Alltel one. As I said, we should see a 12 month long process to get everything finalized before anything happens. Then, we should see the two networks operating independently until AT&T decides T-Mobile is no longer a viable product. T-Mobile would most likely remain as a low-cost solution to consumers while AT&T would provide high-end devices, premium services and business solutions on a fleet level. The complete merging of the two companies may never happen or it could happen relatively quickly or slowly. At this point, there is no telling until AT&T gets down into the T-Mobile customer base and finds out what it needs to do against what it wants to do. You should, however, start pondering what it will feel like with just Sprint, Verizon and AT&T-Mobile.
The benefit here is that AT&T has said they will increase and roll-out their 4G LTE network (if successful) on a larger and faster scale. AT&T claims to now be able to reach out to 294 million people in America, that's more than 45 million more they had originally anticipated with their initial roll-out plan. You can expect AT&T to take advantage of T-Mobile's failed future LTE plans, because the company said that 4G wasn't important, and use their network to expand their footprint in the 4G world.
T-Mobile has already put up a FAQ on their website with several questions regarding this deal. The ever so unimportant question of "Will T-Mobile be getting the iPhone?" is a clear a definitive, "No".
T-Mobile USA remains an independent company. The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G.
Of course, the company is still lying about its network, which we're not surprised about. The question of "Should I wait to sign up to T-Mobile USA or upgrade my phone?"
No, T-Mobile USA offers the latest wireless devices that are affordable on America’s Largest 4G Network and the combination of AT&T and T-Mobile USA will mean even stronger service for our customers. Now is a great time to be a T-Mobile customer.
Whatever you say, T-Mo. As it stands, though, if this shouldn't cut through all the red tape, AT&T will have to fork over $3 billion to T-Mobile along with some of its AWS spectrum for its LTE rollout, and AT&T will have to hand over T-Mobile rights to roam on their network. Rough.
We will definitely be discussing this on our show so make sure you are tuned in Sunday at 9PM ET!
Additionally, here is some extra material on this breaking news.