In a huge announcement on Sunday, March 20th, AT&T released that they had acquired T-Mobile USA from Deutsche Telekom. The German company will be receiving $25 billion in cash and $14 billion in AT&T stock, giving Deutsche Telekom an 8% stake in the company.
T-Mobile USA customers currently total up to 33 million, and will be added to AT&T’s humongous user base to create a large mobile phone company servicing about 129 million people just in the United States. Their numbers now tower over Verizon’s 94 million subscribers.
This deal will worry antitrust regulators for reasons other than the subscriber count, however. With AT&T and T-Mobile USA being the only two GSM phone carriers in the United States, there will only be one once the deal is completed. This gives AT&T a complete monopoly on the phone standard, and is definitely something to worry about in terms of pricing.
T-Mobile customers wanting 4G connections will definitely benefit from the deal, though, as their carrier only runs on HSPA+, and has no plans on upgrading to real 4G technology. HSPA+ generally measures up to 4G speeds, but lacks the infrastructure to handle a full network load like 4G technology offers. These customers will not have to worry any longer.
This deal announcement follows right on the heels of the rumors stating that Sprint Nextel was getting ready to make an offer for the company to Deutsche Telekom, who had been reportedly unsatisfied with T-Mobile USA’s recent performance. They were reportedly interested in public offers that would result in the company spinning off, but obviously have taken a liking to this private offer.
This deal has been agreed upon by both company’s boards, but has to go through the regulatory approval process still, where it might get held up due to the monopolization of the GSM carrying business, as discussed earlier.
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