AT&T announce plans to acquire T-Mobile for $39 billion on Monday. This acquisition will make AT&T the largest network in the US with over 130 million subscribers. So is this a good development for wireless subscribers?
For AT&T subscribers, the acquisition may be the solution to making the AT&T network more reliable. T-Mobile subscribers will benefit from access to a more sophisticated network and handsets. For the first time they will have access to the iPhone.
However the real question is what will happen to the costs? With access to the iPhone and the more sophisticated Droid smartphones T-Mobile subscribers’ cost of upgrading will decline. Subscribers will be able to own handsets with a higher trade in value. It is estimated the trade-in value index of a iPhone is between 45% to 60% of the original trade-in value.
The real question is what will happen to wireless calling and data rates? T-Mobile has been the lowest price wireless plan option in the market to-date. Some experts feel that T-Mobile has helped drive AT&T and Verizon mobile phone plans down. AT&T claims the wireless market is today and will continue to be a fiercely competitive market. However, consumer watchdogs are concerned that there will be a virtual duopoly with this merger. Verizon will be and only long-term competitor and Sprint’s long term viability is in question.
It is unlikely T-Mobile subscribers will be subject to higher wireless charges. First the acquisition will take some time to complete before any subscriber plans can change. There is also speculation T-Mobile subscriber’s plans will have to be grandfathered to prevent mass defection plus regulator approval for the merger.
One thing is clear, Verizon will have to develop a new a new marketing plan to respond to the “more reliable AT&T network”.