René Obermann

AT&T-Mobile: AT&T buys T-Mobile USA for $39B

March 20, 2011: 3:05 PM ET

AT&T announced that the new entity would be the biggest in the US with 130 million subscribers.

Image via Engadget

The national mobile carrier choices for US consumers will decrease by one if the purchase of Deutsche Telekom AG's U.S. T-Mobile unit by AT&T (T) passes regulatory hurdles.  The $39 billion deal, announced ahead of a major wireless conference in Orlando tomorrow, would create the nation's largest wireless carrier and drop the big US mobile carriers to just three.

Charles Golvin from Forrester Research said of the deal:

"AT&T's acquisition of T-Mobile, if approved, brings good news and bad news. The good news: high-speed mobile broadband service will improve in quality and coverage, including — in the long run — those in rural communities outside the reach of terrestrial broadband today. The bad news: the cost of that service won't come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the US. While clearly troublesome for Sprint and other mobile smaller mobile competitors, It's also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer."

The new entity would also be the only GSM carrier in the US, something that will certainly play big with global users who use GSM when they travel abroad.  The move will also consolidate spectrum held by the two units.  The good news for current consumers is that radio equipment and devices on the two carriers are largely, but not totally, compatible.

When the deal is all said and done, Deutsche Telekom will own about 8% of the new, combined AT&T according to an internal document shared with TmoNews.

I don't expect this to fly through US regulatory agencies because the mobile landscape, contrary to Google (GOOG)/Verizon's (VZ) claims, isn't competitive enough in the US.  This move will only make it worse.

T-Mobile USA has set up a Q&A for its customers on the transition, expected to take 12 months.  AT&T has set up a site at Mobilizeeverything.com for more information on the deal.

Press release follows. More

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