All You Need To Know About the AT&T Acquisition of T-Mobile, For Now

So if you haven’t heard yet, AT&T has officially announced that they are buying T-Mobile from Deutsche Telekom for $39 billion (pending all regulatory hurdles, of course). For a lot of people this came out of the blue and has already caused a lot of confusion, excitement, and sheer panic. So before you go calling T-Mobile customer care and screaming at them for their decision to be purchased by AT&T (I’m pretty sure that the poor customer service rep had nothing to do with T-Mobile’s decision) I figured I’d cut through some of that, and explain a little why this is happening and what it means to current users.

I. Why? God, Why?!

Well, the reasoning behind AT&T’s purchasing of T-Mobile is pretty clear from their press release. It’s about coverage and alleviating stress on their poor data network. AT&T has gotten a lot of flak for their dropped calls and slow data connections (almost entirely stemming from the launch of a little phone called the iPhone a while back). Now, the original solution would have been to build more towers, but what most people don’t realize is that to build new towers a company has to go through a lot. There are tons of regulations and approval processes in order to build the ugly things, especially in major metropolitan areas. Not to mention the sheer cost in build them.

The simple solution for AT&T was to buy the towers that are already there instead. T-Mobile’s towers were undoubtedly the first that came to mind. The fact that T-Mobile is the only other major GSM carrier in the USA (besides AT&T) meant that after they bought said towers there wouldn’t be much backend changes required. They could, in a sense, buy the towers, then flip a switch (at least for EDGE services, which they can use for phone calls and text) and bam, a lot more coverage for AT&T subscribers and that dropped call problem is pretty much solved.

II. OK, But Why Does T-Mobile Hate Me Enough to Sell Me To Evil AT&T?!

Now, T-Mobile’s information on this will tell you how it makes sense for the two companies to work together for the greater good etc. but I’d rather believe that, like most acquisitions, its about the money.

AT&T is paying Deutsche Telekom (the German parent company of T-Mobile USA) $39 billion dollars to buy the company. But that’s not all. According to some sources, Deutsche Telekom is also getting 8% of AT&T AND a seat on AT&T’s board of directors. Which isn’t too bad for a company that was obviously trying to sell themselves off already (remember all those Sprint is buying T-Mobile rumors? Wouldn’t be surprised if those were true but AT&T jumped in with a lot more money).

Don’t get me wrong, this does position T-Mobile and AT&T better in the scheme of things, making them the largest carrier in the USA (125 million vs Verizon’s second place, 93 million). This will make it a lot easier for the two companies to compete. Now, if you just sold your company off would you care terribly about how well it did it after that? Probably not.

III. I Have AT&T, This Better Not Affect Me!

Well, in the short term, I doubt you’ll even notice. Only real thing you might notice is your voice and text coverage might get better, but that’s about it.

IV. I Have T-Mobile, Do I Sell My T-Mobile Phone Now?

No! To be completely honest, at least for 12 months or so (while the deal gets ironed out and goes through the regulatory channels) you won’t notice any changes at all.

Now, the real question here is do you buy a new phone from T-Mobile with a 2 year contract anytime soon? Why would that be an issue? Well, AT&T said this morning that they plan to repurpose T-Mobile’s 3G towers for use as 4G LTE towers. In effect that would mean that the 1700mhz frequency being used to give T-Mobile users 3G would broadcast 4G LTE and that would, in effect, stop T-Mobile devices from getting 3G.

Now, this has obviously caused concern amongst T-Mobile users as they are worried they will have to buy AT&T 3G phones but I’d like to clarify something. AT&T has said that this transition can take a couple of years and Ralph de la Vega, AT&T’s head of wireless and consumer services, said “this will happen as part of the normal phone upgrade process.” Which says to me they aren’t dumb enough to just drop the frequency at once.

First off, they have a year before it’s even approved, but then after that I would imagine they would roll out new phones (like they do anyways) and these new devices will have AT&T’s 3G frequencies built in and none of the new phones will have T-Mobile’s 3G. The idea being that as you get upgrades for newer devices, you’ll end up with one using AT&T’s 3G anyway before the shut down of T-Mobile’s 3G. Not too mention since they are going the route of LTE, in order to get LTE you’d have to buy an LTE capable phone anyway just like with Verizon.

VII. I’m a T-Mobile Authorized Dealer, Should I Panic?

Unfortunately, you might want to. You may not know this (since you’re a T-Mobile dealer) but AT&T no longer has authorized dealers (or aren’t accepting any new ones). So this brings the question, if you are a T-Mobile reseller will you be allowed to become an AT&T dealer? History says no on this one, but until this is all said and done (you still have a year or so) there’s no way to actually know. Just wait for an email from them over the next year, but maybe start looking at selling some other carriers in the meantime.

Anyone have any other questions, comments, or corrections? Leave them in the comments or chat with me on Twitter or Facebook.

Sources –

AT&T Press Release
Mashable
T-Mobile FAQ