So I wrote last week about how Sprint was in talks with T-Mobile regarding a possible merger/purchase. I have to give props to T-Mobile for making us all look one way, while they were working on something in the complete opposite direction. The AT&T buyout of T-Mobile makes much more sense, however.
Here, you have two carriers that operate on the same network infrastructure, GSM, so combining customer base, devices, and capabilities will go much smoother than a merger with a CDMA carrier. To repeat what has probably been said quite a bit already, the AT&T/T-Mo merger will make the largest wireless carrier in the U.S., totalling +/- 130 million wireless subscribers. That’s nearly 42% of the U.S. population, meaning 2 out of 5 people in the U.S. will have AT&T service, crazy right? Not really. In many European countries, there is usually 1 or maybe 2 major carriers offering service. But in the U.S. we have something called “anti-trust” laws. This is to make sure one guy/company does not control a single product and/or service in the interest of fair trade. I’m not going to get into a big diatribe about how that law is only enforced on the surface and that monopolies exist everywhere, and that consumers get hosed…… Sorry I slipped for a second there..
Anyway, what was I saying, oh yeah, AT&T buying T-Mobile makes perfect sense, for both companies. AT&T gets increased customer base, increased network capacity (which they need), and the ability to really take 4G to the next level. Also, AT&T could learn a few things about customer service from the T-Mobile side. T-Mo has regularly been ranked as one of the best in customer service for several years.
This whole merger talk has probably got some wheels turning at Verizon HQ. I mean, think about it, your Verizon, and you’re nipping at AT&T’s heals, you just got the iPhone, and all of a sudden AT&T decides to pull a Steinbrenner, may he rest in peace (buy it’s way to the top, in case you don’t watch the Yankees). What avenues does Verizon have? Well they can do the obvious, buy Sprint, right? Then we’re back to that whole monopoly/anti-trust thingy again. But really, that would be the obvious choice. Or they could start with a purchase of U.S. Cellular, who has roughly 6-7 million subscribers. Then move on to the other regional players like Cricket & MetroPCS. Combine USC, Metro, & Cricket, and Verizon could easily add another 20 million subs. It would also give Verizon a play in a segment that neither AT&T nor Verizon have barely played in, prepaid. With the changing economy, prepaid has made great strides in taking customers away from traditional wireless agreements and built quite a following. Plus from Verizon’s perspective, I don’t see them having to pay $1,181 per subscriber like AT&T is paying for T-Mobile.
Yes, I know, its more than just subscribers, its about infrastructure, resources and innovation, but it all starts with the customers who pay their bill every month.
Good look with the US DOJ and all the regulatory hoops you will be jumping through this year, AT&T. Now lets all keep our eyes on Verizon, they’re pretty smart of there too, you know.