AT&T Minus T-Mobile: Winners and Losers

AT&T has officially put the kibosh on its $39 billion bid to scoop up T-Mobile and become the nation’s largest wireless carrier. With so much politics involved and so many players with something at stake, it’s time to talk about the impact of this deal falling through. Who wins and who loses?

Winners

T-Mobile Customers: T-Mobile is known as the value-priced carrier, both in terms of phones and pricing plans, and many feared that merging with AT&T would put an end to that. AT&T argued that existing T-Mobile customers would be able to keep their plans. However, that policy apparently wouldn’t extend to customers buying a new subsidized phone under contract. T-Mobile has become particularly aggressive of late, offering deals such as two lines of unlimited service for $50, and we expect many shoppers are happy to see that these promotions are not going away.

Sprint: Sprint would have been at a huge competitive disadvantage going up against the duopoly of AT&T-Mobile and Verizon Wireless. The carrier voiced its opposition loud and clear from the very first days after AT&T announced the deal, saying that it would stifle innovation. In fact, Sprint CEO Dan Hesse told me and a small group of other reporters over the summer, “If this thing goes through, we hope you like 4G because it’s probably the last generation you’re going to get.” Ironically, it’s because of Sprint’s inability to invest in its own network that the company now finds itself trailing the other big three wireless networks in the 4G wars. But at least for now, the sky is no longer falling in Kansas City.

Dish Network: Earlier in December, Dish Network said it might partner with T-Mobile USA if the AT&T takeover bid failed, merging its spectrum assets with the company. Now that Verizon Wireless has partnered with cable providersincluding Comcast, Time Warner, and Bright House Network—to sell Verizon Wireless service, the pressure is on Dish to make a move.

Phone and Tablet Makers: HTC, Motorola, and Samsung make a lot of the same devices for different carriers, but having one less player in the mix would have meant less choice for shoppers. The LG G2x, for example, was exclusive to T-Mobile and was one of the first dual-core smartphones on the market. Having a fourth carrier still on the table also enables second-tier companies to make their mark, such as Huawei with its Springboard tablet.

Losers

AT&T: The carrier placed a huge bet on this deal going through, and now that it’s dead AT&T will have to find other ways to solve the short-term spectrum crunch. Having recently been named the worst carrier by Consumer Reports, AT&T could certainly have used T-Mobile’s assets to boost its network capacity, as well as its reputation. AT&T CEO Randall Stephenson says the carrier will continue to invest in its network, which includes a small but growing LTE footprint that feeds phones such as the LG Nitro HD with high-speed data. But AT&T is well behind Verizon Wireless in its deployment.

T-Mobile: Given that many saw AT&T as a savior for T-Mobile’s struggling business, the carrier now has to find a plan B in order to remain competitive. Right now T-Mobile is losing customers, something a $4 billion breakup fee is not going to fix. The carrier doesn’t even have a road map for adding LTE to its network,  and HSPA+ just doesn’t have the upload speeds that LTE does. The fact that Apple passed over T-Mobile for the iPhone 4S is not a good sign, and I don’t believe that devices such as the upcoming Nokia Lumia 710 are going to have enough of an impact. T-Mobile is going to have to do some soul-searching in the coming days and weeks to figure out how to attract more subscribers—or another suitor.

Verizon Wireless: Verizon probably has mixed emotions about this merger falling flat. On the one hand, it will continue to operate the largest national network, and it looks as though it will take some time for AT&T or anyone else to catch up in terms of high-speed 4G LTE coverage. However, the government’s disapproval of this merger was one of the key reasons AT&T chose to give up, which should make Verizon nervous. The carrier would certainly like to be able to acquire smaller competitors over time, and the FCC’s scrutiny will make that difficult.

AUTHOR BIO
Mark Spoonauer
Mark Spoonauer
Responsible for the editorial vision for Laptopmag.com, Mark Spoonauer has been Editor in Chief of LAPTOP since 2003 and has covered technology for nearly 15 years. Mark speaks at key tech industry events and makes regular media appearances on CNBC, Fox and CNN. Mark was previously reviews editor at Mobile Computing, and his work has appeared in Wired, Popular Science and Inc.
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  1. Jamie Criss Says:

    I’m glad AT&T failed to merge with T-Mobile. This would’ve increased the price to carry a cell phone even higher than it already is. My average bill with Verizon is 229.00 for two lines with smartphones. As the bigger companies chomp down the smaller companies will only continue to increase. The Fed should investigate these ridiculous prices we have to shell out just to have a smartphone.

  2. Tyna Mohney Says:

    Thank goodness the merge did NOT go through!!! I’ve been with T-mobile now for 3.5 years and truely like my cell phone and customer service from T-mobile. I used to be with Verizon Wireless but that phone line and internet options got too expensive. I am NOT a fan of AT&T as in the past they have done me wrong with biling issues and their customer service was really bad!!! I do NOT like Sprint, same reason as AT&T. bad customer service. Great news for us dedicated T-mobile fans…now hopefully T-mobile will come out with more cool phones and more options now that the merge did not go through!

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