AT&T Wants To Be America's Largest Cell Company -- to my Chagrin

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Parent Category: Gadgets

Category: Cell Phones

Published on Monday, 21 March 2011 15:26

Written by Brad Balfour

How I have avoided AT&T and Verizon. One provided bad connectivity the other offered horrible customer service. Though it wasn't much better I went with T-Mobile if only because they had to try harder. Now much to my dismay the encroaching monopolization of technology once again steps on toes -- this time with AT&T's impending purchase of T-Mobile.

A $39 billion deal with T-Mobile's parent company, Deutsche Telekom means its customers and infrastructure will become part of AT&T, creating the largest cellular carrier -- and the only one to offer GSM phones -- serving the US.

For Deutsche Telekom, the deal solves a lot of the problems that T-Mobile faced as the fourth-largest carrier. It no longer has to maintain a large network and retail infrastructure to support a smaller carrier base, and won't face the enormous cost of upgrading that infrastructure to the coming LTE 4G standard.

T-Mobile was the only one of the big carriers not to have a clear 4G plan in place; AT&T and Verizon have committed to LTE, while Sprint has been pushing WiMax.

But what about the 4G speeds T-Mobile has been advertising? Those come courtesy of HSPA+, an improved form of current technology that provides maximum speeds of 84 Megabits/second, a touch slower than LTE's 100Mbps, but significantly faster than vanilla HSPA. Still, the enhanced speed seemed to offer bragging rights over AT&T, which has yet to launch its LTE network.

Except AT&T has also made the upgrade to HSPA+ in some areas; it's just not advertising itself as offering 4G, presumably to avoid consumer confusion when it starts releasing LTE devices.

Bewildered yet? It gets worse. Even though it's not promoting it in its advertising, AT&T's website lumps HSPA+ and LTE in the 4G category.

In any case, the merger will give AT&T access to more HSPA+ infrastructure, which will undoubtedly help it roll out faster speeds more quickly; the increased backhaul from the cellular antennas and added spectrum will also help the carrier as it rolls out LTE.

In its press release announcing the deal, AT&T pointed out that it would act as a public good. According to the company, the transaction will ensure "a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the US population to reach an additional 46.5 million Americans beyond current plans—including rural communities and small towns."

In other words, since it's got T-Mobile's infrastructure anyway, it'll now use it to provide LTE services to millions of customers it wouldn't have bothered with previously.

To placate government regulators, the release  devotes two paragraphs to describing why the deal won't harm competition.

Closer to the truth is the statement's recognition that the deal "provides a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets." AT&T also notes that it would have taken it five years to build new cell towers that provide the equivalent density that it gets by adding T-Mobile's.

Although Deutsche Telekom is huge in Europe, its US arm has struggled against Verizon and AT&T, and faced with the prospect of giving up or doubling down and invest in the infrastructure needed to offer LTE and its successors. By giving up on the US, Deutsch Telekom will get $25 billion in cash, end up with about an 8% stake of AT&T and piss me off afer all. Hello Sprint?

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