AT&T’s merger with T-Mobile could mean T-Mobile users might be forced to buy new phones. When most companies merge they usually seek talent (staff), technology, or market share (current subscribers).
T-Mobile definitely has market share – when combined with AT&T’s current scribers, the merged organization would have up to 42% of US subscribers, or 129 million subscribers. That bit of market share will vault the merged company ahead of long-time rival – Verizon. Verizon currently has 101 million subscribers and, for some perceptive, Sprint rounds out the top three carriers with just under 50 million subscribers.
The instant boost in market share is probably a huge bonus. AT&T is likely after something else: T-Mobile’s spectrum space. T-Mobile licenses a big chunk of spectrum space, which AT&T can quickly reconfigure to use it’s faster 4G service. AT&T plans to use the additional spectrum space to meet growing demand for data services – AT&T projects that traffic will be eight to ten times greater in four years than traffic levels were in 2010. The T-Mobile deal instantly increases AT&T’s total number of cell sites that’s equivalent to five to ten years of construction.
T-Mobile currently focuses on 3G, yet AT&T has plans to deploy 4G LTE later this year. The underlying technologies for 3G and 4G are not compatible, possibly leaving 3G subscribers with two choices – downgrade their service to 2G or get a new phone that could be compatible with AT&T’s expanded network.
It’s rumored that AT&T could follow the lead of global operators like Telstra: offer LTE in urban areas use HSPA+ to provide connectivity between urban centers. Phone manufacturers support this approach and phones that support this will provide users with a seamless experience as they roam from one network to the other. AT&T has not said anything about this approach, yet it is the one that makes the most sense because it is a proven approach.
Until AT&T reveals its longer-term plans, T-Mobile users could be left with few choices.