SAN FRANCISCO — Saying “we can’t afford to wait,” AT&T Inc.’s chief executive on Monday framed the company’s planned $39 billion acquisition of T-Mobile USA in terms of benefiting the entire U.S. economy, not just AT&T.
CEO Randall Stephenson said AT&T, the No. 2 U.S. wireless carrier, would work especially closely with federal regulators to secure approval for the purchase of T-Mobile from Deutsche Telekom AG because the combined company will be critical to the nation’s telecom infrastructure.
“The economy needs this investment,” Stephenson said on a conference call to discuss the deal. T-Mobile ranks as the fourth-largest wireless carrier in the United States.
Stephenson added that the deal will make the latest wireless technology, called LTE, available to 95 percent of the U.S. population. Dallas-based AT&T has been long-criticized for performance across some of its wireless network, and Stephenson said both AT&T and T-Mobile customers would see better service upon the deal’s completion, which is set to close a year from now.
Here’s what a completed deal could mean for customers:
• Some time after the deal is completed, T-Mobile phones with “3G” wireless broadband won’t get 3G service any more, and will need to be replaced. AT&T will be offering new phones with access to AT&T’s 3G network to these customers, but it’s not clear what the deals will be. It could take a year for AT&T to turn off T-Mobile 3G, so there will be time to adjust. AT&T will use T-Mobile’s 3G frequencies for 4G instead, for faster data speeds.
• More phone choices for T-Mobile subscribers. T-Mobile, as a much smaller carrier than AT&T, doesn’t get as many exclusives on top-line phones, and it doesn’t have the iPhone. This won’t be a big benefit to T-Mobile subscribers who don’t have contracts – if they want the iPhone today, they can sign up with AT&T or Verizon Wireless. But subscribers under contract would find it easier to upgrade to an iPhone.
• Fewer pricing plans to choose from. T-Mobile and AT&T have different offerings, some of which might disappear from the market.
• No more unlimited data plans. AT&T has stopped offering unlimited data plans in favor of plans with monthly data usage caps and overage fees. T-Mobile USA still offers “unlimited” data for smartphones for $30 per month, but slows downloads after 5 gigabytes of traffic in a month. If the deal closes, current “unlimited” subscribers would likely be grandfathered in, but AT&T would probably stop offering the plan to new subscribers.
• Better network coverage. Combining the two networks will improve performance in some areas, because there will be more towers available. However, today’s AT&T phones can’t use T-Mobile’s 3G wireless data network, and vice versa, because they run on different frequencies.
• Wider rural broadband coverage. AT&T is pledging to increase spending on the construction of a new ultrafast broadband network by $8 billion, to cover rural areas.
• The big question is whether the combination would let AT&T, Verizon and Sprint raise prices on wireless service once competition from T-Mobile disappears. AT&T points out that prices have fallen through a decade of mergers in the industry, but public-interest groups are raising concerns.
The Associated Press and MarketWatch contributed to this report.
coming soon: 3-D smartphone
Hot on the heels of the Nintendo 3DS game device and its 3-D screen, AT&T plans to launch a smartphone with a 3-D screen and a dual-lens camera for 3-D snapshots.
AT&T Inc. said Monday that the LG Thrill 4G will be released within in the next few months. It didn’t say what the touch screen phone would cost.
The Thrill will run Google Inc.’s Android software and will be able to play games and YouTube clips in 3-D, AT&T says.
The screen won’t require glasses for 3-D. That’s much like the Nintendo 3DS, which goes on sale Sunday in the United States for $250.
T-Mobile USA has already said it will sell a tablet computer from LG that can shoot 3-D video. However, it won’t have a 3-D screen.
The Associated Press
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