AT&T, T-Mobile USA merger as much about HSPA as it is about LTE

AT&T  (NYSE:T) dropped a bomb on the mobile industry on the eve of the CTIA Wireless trade show by announcing its $39-billion acquisition of T-Mobile USA (see related article).

While the deal will do much to bolster the operator's position in LTE, the more important piece--at least in the near term--lies in the HSPA+ realm. While AT&T touted the need for more spectrum as data growth surges, it also has moved on the HSPA+ front rather slowly, and it needs that technology now to combat Verizon Wireless' (NYSE:VZ) aggressive rollouts of LTE.

T-Mobile has swiftly rolled out higher speed HSPA+ 21 and is aiming for HSPA+ 42 this year. It has 200 million pops covered with HSPA+ 21-and that includes the backhaul necessary to feed those speeds. AT&T has been moving rather slowly when it comes to adding the necessary backhaul to bump up data speeds.

AT&T's coverage map shows just 10 cities where the operator has the higher data speeds of HSPA available.

The higher data speeds of HSPA will likely continue to play a vital role in the combined network as an appealing fallback for AT&T's LTE network as it goes against Verizon's network. At closing, AT&T will immediately gain cell sites equivalent to what would have taken on average five years to build without the transaction, and double that in some markets. The combination will increase AT&T's network density by approximately 30 percent in some of its most populated areas, while avoiding the need to construct additional cell towers, AT&T said.

Complete Fierce coverage of AT&T/T-Mobile:
--AT&T to buy T-Mobile USA for $39B
--Will regulators approve the AT&T/T-Mobile USA deal?
--AT&T/T-Mobile merger scrambles long-term handset picture
--What happens to Sprint, Clearwire and LightSquared? AT&T + T-Mobile USA ramifications
--Is acquiring T-Mobile USA the answer to AT&T's data demands?
--After AT&T deal, Deutsche Telekom to refocus on Europe

For more:
- see this release

Related articles:
AT&T completes BellSouth acquisition, kills Cingular
Verizon's Alltel acquisition: What are the ramifications?
Grading the top 10 U.S. carriers in the fourth quarter of 2010

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