Yesterday, AT&T Inc. announced acquisition of T-Mobile USA from Deutsche Telekom AG in a “cash-and-stock deal valued at $39 billion.” The deal would make AT&T the largest cellphone company in the U.S., with over 130 million users.
Despite the regulatory risks AT&T faces, the deal’s announcement has both stocks on the move, both being up mid-day Monday.
The jury is still out as to what consequences the customer will face as results of the deal. It’s safe to assume that subscribers to both companies can expect to see service improvements based on expanded coverage areas.
However, T-Mobile is currently leading the way in low cost minutes and data plans. The move is likely to ease pressure on ATT&T from these low cost plans, leading to more expensive services. Furthermore, it is likely that U.S. customers will see the diversity of handsets decrease.
“We know the results of arrangements like this – higher prices, fewer choices, less innovation,” said public interest group Public Knowledge’s president, Gigi Sohn. The group went on to note that eradicating one of the four national phone carriers is “unthinkable.”
For now, news of the acquisition doesn’t mean a thing for customers on either side. The long regulatory process is expected to hold up the close of the deal for at least12 months. It is expected to close, however. And when it does, one of the largest cell providers in the world will be no more.