What impact will the AT&T/T-Mobile merger have on consumers? What about Sprint?

AT&T recently announced that it is proposing to merge with T-Mobile for $39 billion. What does this say for consumer choice and the wireless telecom industry? And how does Sprint fit into the picture now? Zintro experts weigh in.

JTurner, a retail sales consultant in wireless communication sales, says that the AT&T and T-Mobile potential merger will have a positive impact on consumers. “Additional towers and back-up from T-Mobile will allow AT&T to offer an extraordinary broadband experience to customers. With this in mind, I believe the merger will assist consumers in becoming more connected where they live and work,” says Turner. AT&T estimated in 2010 that its long-term evolution (LTE) roll-out, which refers to the 4-G network, would reach 80 percent of the American population. With the merger, this number could increase to 95 percent, which would include areas that still rely on dial-up internet access.

Turner believes that the proposed merger will force the rest of the wireless telecom industry to compete with AT&T’s improved and growing network. AT&T has been the leader in its development of emerging devices through its emerging devices division. Innovative emerging devices in wireless  include cell phones, e-readers, tablets, and even pharmaceutical pill caps. “The fast-paced movement in emerging devices is placing pressure on the wireless industry’s R&D departments. And, if the competition fails to innovate, the competition will be left behind. Consumers want the best,” Turner says.

Sprint is the one wireless carrier that is speaking out against the merger; however, Turner thinks that Sprint may benefit from it. “In any merger, consumers will look to exit their agreements because of past issues with the company. Sprint could benefit by positioning its service to former T-Mobile customer who may not want to sign up with AT&T,” notes Turner.

David W. Schropfer, author of the book The Smartphone Wallet: Understanding the Disruption Ahead, and partner at The Luciano Group, says that the AT&T acquisition of T-Mobile may have a significant effect on consumers regarding mobile payments and mobile commerce. In November 2010, AT&T, Verizon, and T-Mobile created a joint venture called Isis, which allows consumers to make purchases or payments with a cell phone. Isis was created to improve near-field technology and develop partnerships with merchants on behalf of all three carriers. T-Mobile has a minority stake in Isis and both AT&T and Verizon have equal shares. “Regardless of the size of T-Mobile’s stake, the AT&T merger will increases AT&T’s share in Isis to more than 50 percent,” says Schropfer. “AT&T may control Isis going forward. It remains to be seen if the terms of the joint venture precludes any one company from having sole control over the joint venture, but if AT&T is in control after the proposed acquisition, expect to see one of two scenarios: either Verizon will pull out quickly or another carrier, probably Sprint or Metro PCS, would be added to it.”

DeconstructingTelecom thinks that the proposed AT&T/T-Mobile merger will have no impact on US consumers, predicting that AT&T will fail to receive required FCC and DOJ approvals to complete the merger. He states that synergies achieved by combining the two companies are both obvious and compelling: network compatibility (GSM/HSPA+/LTE), access to incremental spectrum, economies of scale, and retail footprint expansion. The merger would allow AT&T to corner the US Global System for Mobile Communications (GSM) market, making AT&T the only operator to support the globally adopted GSM standard.

DeconstructingTelecom states that delivering ubiquitous wireless data connectivity is as important today as was nationwide electrification at the beginning of the last century. The importance of mobile broadband to national competitiveness, productivity, and security is recognized by regulatory bodies and consumer audiences. Thus, this realization will prevent the proposed merger from being completed.

Do you have a question about the wireless telecom industry or any other topic you would like to ask Zintro’s experts? Click here. Would you be interested in signing up to be a Zintro expert and generate free leads for your business? Click here.