T-Mobile has in recent years become a hotspot for mergers and acquisitions. In November 2009 they finalised a merge with Orange, and it was announced on 20 March, 2011 that AT&T had agreed to purchase their USA company from Deutsche Telekom for $39bn (£24bn), creating the biggest mobile operator in the US.
Orange and T-Mobile
The BBC reported the finalisation of the Orange T-Mobile merge that customers of both networks could “hop” between the two through a free "roaming" service which went live on 5 October 2010.
At the time, the network sharing deal was limited to 2G signals, which meant that customers would have seen little benefit when using mobile Internet. However, since then we have “hopped” into the realm of 3G and are now approaching 4G.
It was thought at the time of the merge that analysts believed T-Mobile had the most to gain, though both firms were to benefit with a combined consumer base of 30 million users.
When it came to the rolling out their 3G network, T-Mobile was also there at the forefront using their joint venture company (also co-owned by another network provider Three), Mobile Broadband Network Limited (“MBNL”). Shortly before the 3G rollout, on 16 August Orange had joined MBNL.
AT&T
AT&T has provided innovative, and what they deem to be reliable, high-quality products and services for over one hundred years. Their current mission plan is to connect people through mobile technology and drive innovation in the communications and entertainment industry.
In the acquisition of T-Mobile, AT&T will pay $25bn in cash for T-Mobile USA and the rest in stock, giving T-Mobile's German parent an 8% stake in AT&T. The agreement has been approved by the boards of directors at both AT&T and Deutsche Telekom.
Once combined AT&T and T-Mobile will have nearly 130 million customers which is around a third more than their competitor Verizon Wireless (which is a joint venture between the UK network Vodafone and Verizon).
Deutsche Telekom chairman and chief executive René Obermann’s motivation behind the acquisition is believed that AT&T is the best partner for T-Mobile customers, shareholders, and the mobile broadband ecosystem. Whilst this may be so, it is not a modest fact that it will also provide an efficient path to gaining network assets needed to provide T-Mobile customers with 4G LTE network and any relevant devices. An example of 4G LTE through AT&T can be found here.
Verizon
The acquisition is very similar to how Verizon is connected to Vodafone in the sense that as Deutsche Telekom establishes a relationship with AT&T Deutsche Telekom gets an executive seat on the AT&T board of directors and becomes a major shareholder in the company.
However, Verizon is planning to upgrade its entire nationwide network to LTE by the end of 2013, but it is also expected that with the AT&T/T-Mobile combination in place, they could effectively accelerate the 4G market in the US, potentially making it one of the best in the world.
Even though the AT&T/T-Mobile acquisition logistics are still being negotiated, several reports have suggested that the bond will strengthen AT&T’s hold on the market against Verizon. Steve Jobs announced at the launch presentation of iPad 2 that the device was available on both AT&T and Verizon verifying the quality of both services. It has been expressed in the US that this merger would shrink the number of major national wireless operators in the US to three from four leaving consumers wondering whether this was a planned merger against Verizon, or a large scope for AT&T to run as the first successful market provider of 4G.
Kelly Foxhall - Kelly by trade is an IT Training Manager at a London law firm. She is also an Internet Journalist that writes about technology, law and ...
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