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T-Mobile May Suffer if AT&T Deal Falls Through
Posted By Christina DesMarais On September 6, 2011 @ 11:28 am In Smartphones and PDAs,Telecom and Wireless,Wireless Networks | No Comments
If the lawsuit filed by the Justice Department this week kills the proposed merger between AT&T and T-Mobile, some analysts say it could leave T-Mobile in a much worse position than it was before the deal was announced in March, reports The New York Times.
T-Mobile has had a reputation for offering low-cost service plans but has recently lost ground to larger rivals which have lured away subscribers with devices like the iPhone and the promise of faster service.
T-Mobile has been mostly motionless for several months while waiting for the deal to close. Analysts say T-Mobile likely froze negotiations with Apple and other phone vendors to avoid competing with AT&T on pricing and release dates. As a result, the carrier might have a hard time wooing potential customers looking for new devices.
Another problem arises if Apple announces an expected deal with Sprint to distribute the iPhone. T-Mobile would be the nation’s only major carrier without the phone.
There is a lot of speculation about what other companies might step up to buy T-Mobile. Some analysts say that international companies that want to establish themselves here might, such as NTT DoCoMo of Japan, France Télécom or Telefónica of Spain. Others say Comcast or Time Warner may want to enter the wireless market.
CNET’s Marguerite Reardon explains in her column “Ask Maggie” why it would be hard for either of the other two major wireless carriers–Sprint Nextel or Verizon Wireless–to buy T-Mobile. The main argument by the DOJ against the merger with AT&T is that the company is a valuable fourth player in the wireless market so both companies would run up against the same problem AT&T is having.
According to SlashGear, AT&T will owe T-Mobile $6 billion if the deal falls through and as such is gearing up to fight for the merger in court. The company is likely ready to make concessions such as pledging to keep T-Mobile’s lower cost subscription plans and selling some assets.
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URL to article: http://technology.inc.com/2011/09/06/t-mobile-may-suffer-if-att-deal-falls-through/
URLs in this post:
 The New York Times: http://www.nytimes.com/2011/09/02/technology/t-mobile-may-suffer-if-att-deal-fails.html?_r=1
 CNET : http://news.cnet.com/8301-30686_3-20100786-266/without-at-t-whats-next-for-t-mobile-ask-maggie/?part=rss&subj=news&tag=2547-1_3-0-20
 SlashGear: http://www.slashgear.com/att-has-two-pronged-plan-to-keep-t-mobile-merger-alive-02176513/
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