AT&T, the nation’s second-largest mobile carrier, has announced plans to purchase T-Mobile, the nation’s fourth-largest carrier, for a mindblowing $39 billion.
Consumers are up in arms over the merger, which many say would overwhelmingly imbalance the wireless market between AT&T and Verizon. By absorbing T-Mobile’s 33 million subscribers, AT&T would have a customer base of more than 130 million. The limited competition against the new wireless giant could potentially prove catastrophic to the customer, however.
"We know the results of arrangements like this — higher prices, fewer choices, less innovation," says Gigi Sohn, a public interest advocate, as quoted at PBS.
Whether the Federal Communications Commission (FCC) and the Department of Justice greenlight this deal is another matter, however. While AT&T wouldn’t make a deal it didn’t believe would get past regulators, Jennifer Valentino-DeVries of The Wall Street Journal believes it will necessitate "significant concessions."
"AT&T wouldn’t try a purchase it thought would fail," she explained. To further establish an image of confidence, AT&T has agreed to pay a $3 billion "cash break-up fee" if the deal doesn’t go through.
AT&T and T-Mobile use similar technology on different frequencies, which means AT&T will be able to expand its network rapidly and with ease. As part of the purchase, AT&T promises to cover 46.5 million more Americans than originally planned, though no date is mentioned in the release. Additionally, AT&T claims to have devoted another $8 billion into the joint infrastructure as a result of the deal.
This added capacity will further strengthen Google Voice/Android communication, and will help Android’s reach on the AT&T network. While iPhone previously dominated the AT&T smartphone market, these new integrations could help Android take the lead.