AT&T to buy out T-Mobile USA

This is another one of those "AMD buys ATI" moments. Except this time, the buyer is AT&T and the buy-ee is none other than Deutsche Telekom subsidiary T-Mobile USA. The two telecommunication firms broke the news on Sunday afternoon, although their $39-billion deal isn’t expected to complete for another 12 months—provided regulatory entities don’t torpedo the whole thing, that is.

As unexpected as this buyout might seem, it makes plenty of sense when you hear AT&T and T-Mobile explain it. A successful merger between the two companies will leave AT&T with "cell sites equivalent to what would have taken on average of five years to build without the transaction, and double that in some markets," they say. The most densely populated areas of AT&T’s network should see an increase in network density of about 30%.

Translation: improved service, better call quality, and provisions for further growth in data traffic. AT&T says its mobile broadband traffic has grown by 8,000% since 2007 (that’s when the original iPhone came out, for those keeping score), and it’s expecting traffic in 2015 to be "eight to 10 times what it was in 2010," so the extra capacity will surely come in handy.

As icing on the cake, AT&T adds that acquiring T-Mobile will expand its 4G LTE coverage to "an additional 46.5 million Americans beyond current plans – including rural communities and small towns."

Securing regulatory approval for the merger might be a significant hurdle to overcome, though. As of last April, according to ComScore, AT&T and T-Mobile accounted for a combined 37.2% of the U.S. wireless market—more than Verizon and several times more than Sprint. Also, last summer, the folks at IE Market Research forecast that AT&T’s high growth rate alone would let it outgrow Verizon by 2014. AT&T actually addresses anti-trust concerns in the buyout announcement, claiming the U.S. wireless industry is "one of the most fiercely competitive markets in the world and will remain so after this deal." We’ll have to see if U.S. regulators feel the same way.

Comments closed
    • shank15217
    • 9 years ago

    This should be illegal, buying out t-mobile will hurt consumers greatly, we’ll be down to one gsm carrier thats bullshit.

    • eitje
    • 9 years ago

    Hot T-Mobile Girl: “I was just being mean to get AT&T’s attention! Hahaha!”

    • ew
    • 9 years ago

    Crud. T-Mobile has the best prepaid plans.

    • albundy
    • 9 years ago

    i can just picture the commercial where the hot t-mobile pink polka-dot chick is replaced with some geriatrically challenged fat bald dude trying to sell me on a plan that is way overpriced from a company that I truly despise, while trying to persuade me that i will not get any dropped calls.

    …can you hear me now?

      • Corrado
      • 9 years ago

      Do you HAVE AT&T? Because I do. And I have for the past 4 years. I can count, on 1 hand, the number of dropped calls I’ve had in the past year. I’ve been to NYC, I’ve been to DC, I’ve been to Boston, Buffalo, Pittsburgh, Cleveland, Cincinnati, I live in Philly. My co-worker with Sprint has dropped calls more often than I do, and he’s had 3 different handsets over the past 3 years, so its not a particular handset either. I’ve had nothing but iPhones since being on AT&T. I’ve been on Verizon with Blackberries and WinMo phones, I’ve dropped calls there too. AT&T is simply not as bad as trolls on the internet want you to believe. Do they drop calls? I’m sure they do. My father had problems with dropped calls on his iPhone 4. So did 2 buddies of mine. Turns out it was software. They did a restore of the phone, and their problems went away.

        • NeelyCam
        • 9 years ago

        How do you know you’re the norm and not the outlier?

        I’ve had stuff like 1) zero signal at work, 2) five bars but unable to send/receive texts or phone calls. And yes, I have AT&T

        • JustAnEngineer
        • 9 years ago

        I probably average about 20% dropped calls with my AT&T service. There are three intersections that I drive through every day (one rural and two urban) that have a better than 50% chance that a call will be dropped.

        Even when calls aren’t dropped, the audio quality of the AT&T service is very poor.

        • Beelzebubba9
        • 9 years ago

        I’ve had AT&T since 2003 and their service is atrocious. I could make calls just fine on a feature phone in rural america, but once I moved to New York in 2007 I had to pretty much switch to Skype to call anyone reliably. In my office on the ~50th floor of the Empire State Building I’d get a full 5 bars of reception and be utterly unable to place or receive a phone call. And this wasn’t a one time thing – it held true for the two and a half years I was there. I have a series of screenshots from my year in Seattle of my iPhone with 5 bars of 3G reception being unable to make any data connection as well. I stick with AT&T because everyone I know has an iPhone or is on AT&T for other reasons which makes my plan much cheaper because I can skimp on voice, but depending on how the iPhone 5 launch goes later this year I may just eat the ETF and switch to Verizon. Not that big red is much better, but I can’t imagine any major carrier being worse than AT&T has been for me.

        Regardless, I’m glad you’ve had much better luck with AT&T. Maybe you did something stellar in a past life to deserve such good cell-Karma. 🙂

      • ludi
      • 9 years ago

      [EDIT: Mis-thread, intended as reply to Corrado]

      Glad it works for you, because it’s given lots of trouble for me, and Denver metro is not exactly a backwater market. The trouble, in fact, is largely thanks to AT&T and iPhone users. AT&T signed their exclusivity deal with Apple, but didn’t build up their infrastructure sufficient to capture the additional load the iPhone would end up putting on it. Lo: everyone suffered QoS reduction.

      It’s also worth noting that the markets you just cited are some of the largest and densest in the US, so the cellular infrastructure is very dense and the cells are correspondingly small. It would require heroic feats of stupidity to not have good coverage in any of those.

    • JMccovery
    • 9 years ago

    Although this deal sucks great donkey balls, the penalty for failure is very interesting… $3 billion, unused AWS spectrum, and a roaming agreement?

    Maybe DT is actually hoping for this to fail just so they could sell T-Mobile USA to someone else, hopefully that someone else would not be Sprint, nor Verizon.

    Why do I have the feeling that if the deal does go through, either Comcast, Time-Warner Cable or Mediacom would be At&t’s next target?

    • blastdoor
    • 9 years ago

    As an AT&T customer, I’m happy about this IF it really does improve the AT&T network faster than would have otherwise been possible.

    I’m not so worried about higher prices since AT&T still has to compete with Verizon.

      • sigler00
      • 9 years ago

      While it is true that AT&T wouldn’t be the only wireless carrier if the deal goes through they will be only large GSM carrier on the market, so it will have a monopoly in one crucial sense.

      Even if you don’t care about GSM/CDMA standards the fact buying an unlocked GSM phone will leave you with one less carrier to choose from is bad news for customers indeed and why I’m sure AT&T is hoping this deal will go through.

      I for one am very concerned especially with the corporate friendly government we seem to have these days.

    • Corrado
    • 9 years ago

    People seem to be forgetting that T-Mobile is debt saddled and is hemorrhaging money and subscribers. DT is so desperate ti unload them that they’re willing to keep the debt from TMo USA. If AT&T wasn’t buying them, the only other candidate would be Sprint, who couldn’t do anything with them, and doesn’t have the money to do it anyway. If it wasn’t AT&T, they’d likely be spun off into their own company separate from DT. Then they’d likely end up shriveling and dying as a company.

    • mcnabney
    • 9 years ago

    How does a non-LTE company (T-Mobile) help expand a non-LTE company’s (AT&T) 4G LTE coverage?

    Also, since when was T-Mobile known for rural coverage? Alltel, and Verizon to a lesser extent are known for rural coverage. T-Mobile’s coverage sticks to metropolitan areas and interstate corridors. AT&T is spending $39B for a bunch of customers (most of them will move to Sprint, due to price) and overlapping network that may or may not help their congestion.

      • Prion
      • 9 years ago

      I had to switch FROM T-Mobile to AT&T due to lack of rural coverage. Worth noting that Verizon also did not have service in that area (but Sprint did).

        • mcnabney
        • 9 years ago

        Interesting, where do you live? I moved from T-mobile, which was good in my metro-area, to Verizon which is good everywhere I go. I travel throughout Missouri, Kansas, Iowa, Nebraska, and the Dakotas. Verizon works everywhere, flawlessly, so I don’t mind the higher bill. T-mobile only worked along a few interstate corridors and a couple cities. T-mobile was a good company and if I ever stopped traveling and wanted to save money I would go back there. Not going to AT&T for too many reasons.

          • Usacomp2k3
          • 9 years ago

          Here in southern Orlando-ish, T-Mobile owns 3 of the 4 nearest towers to my house. The 4th is an independent. Roaming calls always get dropped before 1st party. I’m almost tempted to switch to AT&T once this goes through since Verizon drops calls right and left at home.

      • gbcrush
      • 9 years ago

      Here’s my understanding:

      AT&T wants to go LTE.
      AT&T Needs new towers/antennae (and or) needs to upgrade existing towers to go LTE.
      AT&T says: Oh hey, look, t-mobile has a bunch of towers that overlap ours!

      (as a possible bonus, Tmobile already broadcast in the 1700Mhz band, which just happens a band already established for LTE usage (and pushed out by MetroPCS).

      In short, snapping up T-mobile’s towers provides AT&T some infrastructure on which to dedicate their roll out of LTE. This saves them from having to build as many new towers, or upgrade as many of their already-over-upgraded ones they currently own.

      Infact, right now T-mobile’s towers do not benefit AT&T’s 3G service one bit 9AT&T uses an 850Mhz Band), and T-mobile customers have been “guaranteed” a continuation of their expected service for the next two years. After that, AT&T has admitted their old Tmobile phones will no longer work at all, when they switch over to LTE. I think that’s pretty telling that AT&T made the merger for infrastructure as much as anything else.

    • MadManOriginal
    • 9 years ago

    [quote<] "one of the most fiercely competitive markets in the world and will remain so after this deal." [/quote<] Damnit AT&T, you almost made me ruin my monitor by spraying milk all over it.

      • sweatshopking
      • 9 years ago

      that’s what my Sicilian gangsta forefathers would say about their “protection” rates.

      • sweatshopking
      • 9 years ago

      you sure that’s “milk” in your mouth….?

    • sweatshopking
    • 9 years ago

    I find it quite interesting that the carrier in the US, where the “free market” is supposed to give the best service/price/prizes/amazing/bestlifeevar, is a carrier from socialist europe. they’re cheaper, have good coverage, speeds, and the best service. Not really surprised, actually.

      • burntham77
      • 9 years ago

      Shh. Don’t tell anybody. Americans might learn something.

        • sweatshopking
        • 9 years ago

        HA. good luck there. I am quite sure your average american won’t learn anything in the near term. Just look at school scores. average of 35% of grade 8’s meet the grade requirements. NOBODY is learning anything down there.

          • NeelyCam
          • 9 years ago

          [quote<]average of 35% of grade 8's meet the grade requirements. NOBODY is learning anything down there.[/quote<] Um... don't they teach logic in Canada? 35% meeting grade requirements != "NOBODY is learning anything"

      • Usacomp2k3
      • 9 years ago

      The heavy regulation of telecommunications negates any sense of “free market” that might exist.

        • mmmmmdonuts21
        • 9 years ago

        The market acts more like a cartel than a “free market”

          • JMccovery
          • 9 years ago

          Definitely.

          This was the question on the minds of AT&Ts wireless unit executives:

          “We have an extra $39 billion laying around, what should we do with it?
          0. Upgrade our network and lower prices? (Doesn’t exist because nobody puts a number 0)
          1. Upgrade our network and keep prices the same?
          2. Upgrade our network and charge customers more?
          3. Upgrade nothing but our salaries and charge customers more?
          4. Buy a competitor, claim this as ‘an upgrade’, and still charge customers more?

          Ah, unanimous votes for number 4.”

            • sweatshopking
            • 9 years ago

            I think there’s a 5.

            5. Buy a competitor, claim this as ‘an upgrade’, and still charge customers more? AND GIVE US ALL BONUSES!!!

        • sweatshopking
        • 9 years ago

        I don’t think that the issue with the “heavy regulation of telecommunications is negates any sense of free market” is correct for a few reasons.

        1. the sentence makes no sense.
        2. AT&T is profitable. So’s verizon. Sprint is not. I don’t think sprint is saying “damn you government, if only you’d stop meddling in my business, I’d be making a fortune!!!” sprint’s issues have been customer service for years. And low and behold, they started fixing it, and the churning stopped/slowed.

        Blaming bad management, cartels, and you getting it up the ass, on the government is foolish.

          • Usacomp2k3
          • 9 years ago

          I’m not blaming anything on the government. I’m just saying that an industry that is under heavy regulation can not be truly be considered a “free market”.

            • sweatshopking
            • 9 years ago

            ok then, I understood your post to suggest that the reason for such a poor product was due to regulation.

        • blastdoor
        • 9 years ago

        You’ve got your causality chain backwards. It’s the lack of competitors that leads to regulation, not the other way around.

          • BobbinThreadbare
          • 9 years ago

          I don’t see any anything in Usacomp2k3’s post that implies causality.

        • destroy.all.monsters
        • 9 years ago

        “Heavy regulations of telecommunications”? What country are you living in? It surely isn’t the US.

        We just had the ridiculous Comcast merger go though and after much handwringing still they have no power over ISPs. Some heavy regulation!

        • kc77
        • 9 years ago

        Regulation? What regulation? If we had it (and we don’t) then regulation would prevent this merger.

        What regulation exactly makes ATT charge extra for tethering which all smartphones can do automatically?

        What regulation exactly makes ATT turn off HSUPA which most 3G/GSM smartphones can do out of the box?

        What regulation makes them throttle or get rid of unlimited plans?

        The answer: there are no regulations making that happen. It’s the lack of it that allows ATT (and Verizon) to get away with this crap year after year. Hell if we didn’t have the Internet we would still be on 2G because they would try and convince us it’s the fastest thing available.

    • gbcrush
    • 9 years ago

    Guess I’m staying CDMA for much longer than I thought. Also, goodbye potential for new Sidekick. Yes t-mobile is still t-mobile for the next year, and you’ll probably come out. But beyond that?

    Also, as have been mentioned on other sites, I hope this doesn’t prompt big V and Sprint to shack-up in bed. I know Sprint needs a good boost, and a good leg-up into the LTE market, but heck if I want to see Sprints (relatively) good policies get dashed against the recovering grubby-hands of Big Red. Not to mention a two-horse Big Carrier race scares the jeepers out of me. It may prompt me to actually look at one of the growing small/lease-time carriers if that happens.

    …I said carriers a lot. Heh. Now I’m picturing planes. With mobile-provider logos for squadron insignia, taking off and dropping bombs on opposition cell-towers. 😀

    • no51
    • 9 years ago

    The more important question is, what will happen to Carly Foulkes, the T-Mobile girl.

      • gbcrush
      • 9 years ago

      “I’m a T-mobile 4G. Unfortunately, I’ll soon be married into the family that has all that sluggishness I was snarking to you about. Yes, it’s the same family that a couple of my android based cousins joined earlier, only to find out that their upload speeds were capped to below 3G levels. And unfortunately for my descendants, if you find any cool applications that don’t come from the android market place (like from Gameloft *shudder* or the upcoming Amazon marketplace), you won’t be able to load them onto the phone.

      I’m also told I’ll have to give up pink dresses with polkadots.”

      *Cues sad t-mobile ring-jingle for one last time*

        • mcnabney
        • 9 years ago

        That would be T-Mobile 3.5G and I think she is planning on asking Chad out.

          • gbcrush
          • 9 years ago

          Hey, I’m not denying that tmobile has their own spin. Their 4G is a joke as far as being “4G” is concerned. From what I’ve heard though, people are enjoying their service, round here.

          I’m certainly enjoying the commercials 😀

        • charles_chang
        • 9 years ago

        would having an unlocked phone fix the app issue?

          • gbcrush
          • 9 years ago

          … If by unlocked, you mean “rooted” android phone, then yes. Once rooted, you should be able to side-load some applications, I believe. You should also be able to use some custom ROMs (basically completely replace the OS) that will allow sideloading, and other app purchases.

          I’ve also heard of an app called “Sideload Wonder” or something like that, that should allow you to side-load apps on to the Samsung Captivate (dont know if it works for other AT&T android phones) wihtout rooting.

          … If by unlocked, you mean a jailbroken iPhone, then yes. Jail-breaking is the only way you’ll get non-appstore apps onto the iPhone.

          … if by unlocked, you mean the traditional carrier-unlocked, carry it to any GSM carrier and pop in a simcard, then maybe yes/maybe no. That sort of unlocking doesnt have anything to do with the software restriction AT&T placed on android phones. So, if you bought a GSM android phone from somewhere other than AT&T, there are probably no restrictions on side-loading apps. If it works on AT&T’s network, you’re good to go with AT&T.

          This is all to the best of my knowledge. Hope it helps some?

            • charles_chang
            • 9 years ago

            yeah i bought a nokia n8 over the weekend, which runs s^3. I doubt at&t will have much control over what i can and what i cant install.

      • JustAnEngineer
      • 9 years ago

      Maybe she can marry some rich actor twice her age like the original T-Mobile girl did (CZJ).

      • burntham77
      • 9 years ago

      Foulkes! Thank you for the last name. She is adorable.

        • sweatshopking
        • 9 years ago

        you’re all a bunch of dirty old pervs.

          • NeelyCam
          • 9 years ago

          Wife took your balls with her when she went to school this morning?

            • albundy
            • 9 years ago

            Unless he is the wife… hah! +1

            • sweatshopking
            • 9 years ago

            no. i’m not my wife. neely was right. she has them with her.

            • NeelyCam
            • 9 years ago

            I hope she’s gentle. The world needs more baby trolls.

    • destroy.all.monsters
    • 9 years ago

    Your translation is wrong Cyril. Let me help you – Elimination of the only bring your own phone plan, higher rates, the abject horribleness of AT+T’s customer service (there is none), terrible billing, and immense arrogance and consistent anti-customer moves from AT+T.

    This is a seriously bad thing. The end of any GSM based competition in the US. Having been with all the different carriers over the years T-Mobile is the only one that doesn’t gouge you left and right and provides a bring your own phone plan. And their store employees actually know something – something not seen at AT+T since they started purging all their Cingular retail employees.

    How you can get excited or even paint this as having any positive at all astounds me. Do you own AT+T or Deutsche Telekom stock?

      • JustAnEngineer
      • 9 years ago

      It’s more positive for DTE than for T.
      [url<]http://finance.yahoo.com/q/bc?t=5d&s=T&l=off&z=l&q=l&c=DTE.DE[/url<]

        • destroy.all.monsters
        • 9 years ago

        I’m aware of why Deutsche Telekom wanted to sell – what I take issue with is TR painting this as a good thing. It clearly isn’t for consumers.

        Between this and the anti- union Friday Night Topic awhile back I find these troubling developments. AT+T deservedly has a horrible reputation. Will there be a “Why Sony is So Great” article cleanly looking over their heinous abuse of not only GeoHot but its consumers and PS3 owners replete with apologia for their rootkits? I may be exaggerating a bit but as a long time reader this concerns me. I don’t want to see TR become a corporate booster site (or flying spaghetti monster forbid – an adjunct to free republic), just to tell it like it is.

          • MadManOriginal
          • 9 years ago

          I don’t see ‘TR’ putting their opinion out about this at all, just a bunch of quotes from AT&T. They’re, you know, reporting the news not mixing editorializing in with a news article.

            • destroy.all.monsters
            • 9 years ago

            AMD buys ATI looked like it was possibly a bold new (and largely positive) future. It wasn’t until quite a bit later when AMD started bleeding red ink that people considered it a negative. So there is that. When someone says “as icing on the cake” it is a positive sell.

            A neutral article would state why it might be both good and bad. Quoting only positive press releases is still spin.

            • shank15217
            • 9 years ago

            Please stop with the amd and ati examples, amd wouldn’t have a chance to compete with Intel after Intel woke up and smelled the coffee without ati. Amd overpaid for ati but they are handing it to nvidia and about to release some very competitive products in Intel’s domain because of ati.

            • destroy.all.monsters
            • 9 years ago

            I don’t think you understood my point. MMO was attempting to point out that he thought the article was neutral and I disagreed with him.

            This isn’t about how ATI was bad for AMD (it wasn’t) but an attempt to look at why TR is being a booster for unrestrained capitalism at the expense of the consumer. That was my point.

            • NeelyCam
            • 9 years ago

            No, as I recall, the initial reaction was that “This is suicide!!”. AMD was so deep in debt you couldn’t even see the roadmaps anymore.

            The general consensus was that it was insane, and the general consensus was wrong. Buying ATI kept AMD alive and resulted in Zacate and Llano… but AMD as a company still isn’t doing that great. Zacate is a fantastic platform, but not aimed for anything that has enough volume to make enough money. Llano is based on a weak CPU platform that is supposed to compete with much faster CPU (SandyBridge) and GPU (Mobile Radeon/NVidia) options.

            I’m starting to think Llano missed the mark, and the longer it takes for it to make it to the market, the more it’s missing the mark.

      • HiggsBoson
      • 9 years ago

      Exactly. I’m currently on one of T-Mobile’s prepaid plans ($30, 1500 text/min, 30mb data) because it was a singular and unique option within the industry. It was nearly perfect for my needs and budget. With this announcement I’ve not much hope that it’s going to continue, and I have every expectation that this time next year, my overall costs are going to go up, and up quite a bit.

      My only wonder is what the take over means for service quality. I can’t say I’ve ever had any major issues with T-Mobile’s availability or call quality in the US (although their coverage could’ve been better) for the price. However, in the same locales, I’ve never heard anything but complaints about AT&T. If the merged company basically adopts AT&T’s network “quality” level, that’ll be huge step down. I know what I just said is the definition of anecdotal, so take it with a grain of salt, but I still stand by it.

        • destroy.all.monsters
        • 9 years ago

        According to Consumer Reports among others AT+T is rated much lower than T-Mobile. It isn’t just anecdotal. Plus their plans are unique in the industry.

        Totally forgot the ripping Consumerist has consistently given AT+T. Want some delicious reading just do a search there for them.

        • Usacomp2k3
        • 9 years ago

        Don’t like MetroPCS or Virgin?

          • HiggsBoson
          • 9 years ago

          Not a big fan of the whole MVNO concept, and MetroPCS is a little too limited.

      • burntham77
      • 9 years ago

      I have used Verizon, AT&T and T-Mobile, and T-Mobile seemed the best. Prices were great, service was as good as the others, the phone selection was solid (even 6 years ago).

      • designerfx
      • 9 years ago

      yup, we’re all boned. This is a major step against competition and if sprint merges with verizon (rumors abound), we might be stuck with ATT and verizon, nationwide.

      This is a horrible thing.

        • sweatshopking
        • 9 years ago

        horrible? how? in canada we’ve got 3 major players, bell, rogers, and telus, and our prices are great!! most expensive cell access in the world!! you can join us in the land of “free markets”!! As people started to figure out that only a few companies is a bad thing, and started complaining to get it fixed, they all launched new brands. Bell bought virgin, telus launched koodo, and rogers started really pushing fido. prices are no better, but my cell bill comes with a new color!! (or a cute puppy 🙂

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