Beyond the basics: What does AT&T's acquisition of T-Mobile mean for the industry?

Sue Marek
Now that the shock of yesterday's news that AT&T (NYSE:T) could acquire T-Mobile USA in a $39 billion dollar deal has subsided, the FierceWireless editorial team has turned our attention to deciphering what this means for not just AT&T and T-Mobile USA but the entire wireless industry.

If you have been in this industry for any length of time, you know that there are plenty of successful (and not so successful) acquisitions to look to for historical guidance. Perhaps the most applicable in this situation is Cingular Wireless' 2007 acquisition of AT&T Wireless, which combined two companies with similar network technologies and resulted in Cingular seeing the benefits of the acquisition just three years after the merger was complete. Ralph de la Vega, then the COO of Cingular Wireless, was a major player behind the integration of those two companies and today as president and CEO of AT&T Mobility and Consumer Business, de la Vega again is charged with leading the integration of the retail, marketing and consumer businesses.  

If the AT&T/T-Mobile merger is approved, which company will suffer the most?Of course, perhaps the biggest question mark in this deal is whether it will be approved by the FCC and Department of Justice. In a conference call with investors today, AT&T executives certainly had their talking points ready to champion this deal to the public and regulators. At the top of the list: Touting the benefits of delivering mobile broadband to a footprint that covers 95 percent of the U.S population--something the company clearly believes is aligned with the Obama administration's broadband goals.

Wayne Watts, chief legal counsel for AT&T, said during the call that the company believes that this merger does not change the competitiveness of the wireless industry--clearly addressing another point many believe the FCC will scrutinize closely. He added that if the FCC looks at the merger on a market-by-market basis, it will see that many major markets and even secondary markets have at least five or more competitors.

In terms of synergies, John Stankey, president and CEO of AT&T's business solutions group, talked extensively about how the company will get rid of redundant cell sites but keep other sites that will allow it to have a much denser network that is better equipped for delivering more capacity. He added that during AT&T's due diligence process on the acquisition, it determined that the capacity gains it would achieve in dense urban areas would be between 20 percent and 40 percent. Clearly, this is something that will be of great benefit to AT&T now and in the years ahead as consumers' appetite for mobile data continues to grow.

AT&T expects the acquisition to close in 12 months. In the meantime, the company said it will continue to operate independently of T-Mobile.

For a closer look at all aspects of AT&T's acquisition of T-Mobile USA, please look at our compilation of articles. Here's a breakdown of all our coverage of the deal:

  • 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?
  • AT&T, T-Mobile USA merger as much about HSPA as it is about LTE
  • After AT&T deal, Deutsche Telekom to refocus on Europe