AT&T has just announced its intention to buy T-Mobile USA from parent company Deutsche Telekom in a cash-and-stock transaction valued at approximately $39 billion. Both boards of directors have approved the deal, which would make AT&T the largest wireless company in the United States, assuming the deal passes regulator approval.
The acquisition will allow AT&T to improve network quality for both companies' customers, says AT&T, while also enabling it to expand its 4G/LTE deployment to 95% of the U.S. population.
The rollout of LTE enabled by the deal would reach an additional 46.5 million Americans, AT&T reports, including small towns and rural communities. T-Mobile does not have a clear path for rolling out LTE, the wireless firm said. After the acquisition completes, AT&T would be able to deliver LTE to over 294 million people.
Randall Stephenson, AT&T Chairman and CEO, notes the importance of this move, explaining that "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, Americas high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth."
AT&T also pointed out via its press release that the LTE rollout would help achieve the Federal Communications Commission (FCC) and President Obamas goals to connect every part of America to the digital age.
Business Insider calculated the customer numbers involved in this deal, noting that at the end of 2010, AT&T had 95.5 million wireless subscribers and T-Mobile had 33.7 million subscribers. Their new combined total would be 129.2 million subscribers. In comparison, Verizon Wireless had 94.1 million wireless customers.
But the news isn't all rosy, cautions Forrester research analyst Charles Golvin.
AT&T's acquisition of T-Mobile, if approved, brings good news and bad news. The good news: high-speed mobile broadband service will improve in quality and coverage, including in the long run those in rural communities outside the reach of terrestrial broadband today. The bad news: the cost of that service won't come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the US. While clearly troublesome for Sprint and other mobile smaller mobile competitors, It's also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer.
T-Mobile customers, of course, just want to know if this new deal means they can finally get the iPhone, but there's no word on that just yet.