Yesterday AT&T announced plans to acquire T-Mobile USA for $39 billion. While the acquisition has been approved by the board of directors of both companies, it has not yet been approved by the FCC. No matter what sort of deal the two companies have worked out, at the end of the day the FCC can refuse to allow the them to merge.
Yesterday’s announcement came in the form of a press release. This morning, AT&T held an press conference to further explain its plans with the acquisition, and how it thinks the purchase is a good one for mobile subscribers. While certainly the press conference was an explanatory event for consumers, the event highlighted the good that AT&T claims will happen from the merger. If AT&T can’t convince the masses (or at least the FCC) that the merger is for the good of the wireless industry as a whole, then it might not be able to happen in the first place.
So, what did AT&T have to say?
“We are confident with a thorough review we will receive regulatory approval.” AT&T spoke for nearly an hour to a phone-based audience, speaking primarily on how the merger would help bring LTE to more customers nationwide.
A quote from yesterday’s press release was repeated constantly (no seriously, constantly) during the event “With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns.”
You’ll notice the language AT&T uses puts it in line with President Obama’s plan for bringing 4G to the majority of Americans over the next 5-10 years.
The company plans to make that happen with a three-step plan after the deal closes (assuming it closes):
- Combine 2G and 3G networks
- Rationalize spectrum – frees up spectrum for LTE
- Bring LTE to more Americans, more places than would be possible before
Based on the call, all T-Mobile customers will become AT&T customers in the merger. If you have a T-Mobile handset, that will in effect become an AT&T account, with rollover minutes, AT&T data plan, and using AT&T’s network (combined with the T-Mobile network).
Obviously, AT&T isn’t going to hold a press conference and talk about any of the problems that may arise should the two companies be allowed to merge. The press conference focused on how the merger would help bring LTE access to more Americans faster than AT&T (or anyone) could currently do on its own.
While the combined-company certainly could bring LTE to the US faster than AT&T in its current form alone, it also almost guarantees that if you want LTE in the future-it’s going to have to be from AT&T.
What do you think about the deal? Should the FCC approve it?