Sunday, November 27, 2011

If The AT&T Merger Collapses, What's Next For T-Mobile

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Facing stiff opposition from the Federal Communications Commission, the Federal Trade Commission, and the Department of Justice the planned 39 billion dollar merger of T-Mobile and AT&T is likely to fall apart within the next few weeks. Regardless if the merger goes through or not, Deutsche Telekom T-Mobile's German parent company will continue to unload T-Mobile any way they can.

The first alternative to merging with AT&T would be a merger with another wireless carrier. A previously planned merger with Sprint could pass anti-trust scrutiny in this case because joining the third and fourth place carriers would create a stronger third carrier the would better able to compete with Verizon and AT&T. Although such a merger would create a convoluted patchwork of CDMA and HSPA coverage areas.  For T-Mobile subscribers this wold mean getting the iPhone within a year.

A similar alternative would be a merger with one of the super regional carriers such as Metro PCS. Merging with T-mobile would allow the a super regional to expand into a national carrier that could challenge Sprint as the third largest national carrier. While a merged carrier would also face the complication of running two networks using different technologies, but both T-Mobile and the super regional carriers intend to migrate to LTE for their next generation high speed wireless networks.  For T-Mobile customers this would mean another two years before getting an iPhone.

Another alternative that Deutsche Telekom could consider would be spinning off T-Mobile into a separate independent company.  This may not be the preferred way to unload T-Mobile but won't be any anti-trust concerns for US regulators.  For T-Mobile subscribers there would not much difference in the service they get now but very little chance of ever getting the iPhone.

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