T-Mobile Deal will help USA: ATand T

AT&T’s planned acquisition of T-Mobile USA will advance U.S. leadership in mobile data and improve consumers’ wireless experience, the company’s top executives said on a conference call Monday morning.

The $39 billion acquisition, announced Sunday, would form the nation’s largest mobile operator and reduce the number of big national carriers from four to three. It still faces regulatory review by the U.S. Federal Communications Commission and Department of Justice and is not expected to close for another 12 months.

On the conference call, executives invoked U.S. competitiveness and mobile competition in what amounted to sales job for a deal that some critics have called bad news for consumers.

Together, the two companies say they will be able to deploy a fast LTE (Long Term Evolution) network to 46.5 million more U.S. residents than they could have reached separately, covering 95 percent of the U.S. population.

“This infrastructure will be a competitive advantage for the U.S. for many years to come,” said Randall Stephenson, AT&T’s chairman and CEO. “We’re making a commitment to further America’s leadership for the next wave of innovation and leadership in mobile broadband.” The U.S. leads the world in mobile broadband subscribers, smartphone sales and mobile app downloads, Stephenson said.

AT&T expects the FCC and DOJ to look closely at the deal and believes it will have to discuss divesting some assets to gain approval, said Wayne Watts, senior executive vice president and general counsel.

“We very carefully considered every aspect thoroughly and concluded that this deal can and should be approved,” Watts said.

The FCC will determine whether the deal is in the public interest, and the DOJ will judge whether it adversely affects competition. AT&T contends that competition is strong and growing stronger, with the recent entry of WiMax operator Clearwire and the planned launch of the LightSquared satellite LTE network. Despite the size advantage AT&T and rival Verizon Wireless have over Sprint Nextel and smaller national and regional carriers, consumers in most individual markets have several choices, AT&T says.

Watts said, “Competition is vibrant and will only increase after this transaction."

Until the deal is approved, AT&T and T-Mobile will continue to compete as they have been, the executives said. Then, the networks and services will be merged in a gradual process that will include equipping cell sites to carry both carriers’ frequencies and making all AT&T devices including Apple products available to T-Mobile customers, according to Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets.

Though some cell sites will be taken down as part of the consolidation, the net effect will be more dense coverage, said John Stankey, president and CEO of AT&T Business Solutions, who also has responsibility for networks. For example, AT&T estimates coverage density will increase by between 25 percent and 35 percent in both San Francisco and New York.

“Greater density drives better performance and greater capacity to serve the accelerating data demand, and customers will see a difference. Their experience will improve,” Stankey said.

At the heart of the deal was the need for greater spectrum to make all this network expansion possible to keep up with booming mobile data volume that has grown by 8,000 percent over the past four years, according to AT&T.

T-Mobile USA And Apple's iPhone

U.S. customers of T-Mobile likely will not have access to Apple's iPhone for at least one year, assuming a proposed acquisition from AT&T is granted federal approval.

Following the announcement on Sunday that AT&T plans to buy T-Mobile to create the largest wireless provider in the U.S., a list of frequently asked questions were posted on the official T-Mobile website. In that list, one question is specifically devoted to the iPhone, which is currently only available to AT&T and Verizon customers.

"T-Mobile USA remains an independent company," the FAQ reads. "The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G."

T-Mobile cannot yet offer the iPhone because its wireless network is not compatible with the 3G radio found in the GSM version of Apple's best-selling smartphone. And that won't change until AT&T's proposed acquisition of T-Mobile is approved by federal regulators -- a milestone that is by no means guaranteed.

The merging of customer bases from AT&T and T-Mobile would create a total of about 130 million users, making AT&T the largest carrier in the U.S. AT&T has touted that the acquisition of T-Mobile will help to speed up its own existing nationwide network.

Though they operate on different radio frequencies, the networks of AT&T and T-Mobile have a common technology base with 3G UMTS. That will make it easier for AT&T to merge the two networks and ensure that handsets from both companies will be compatible on the same network.

T-Mobile's FAQ also notes that the acquisition will offer "significant benefits" for customers, improving network quality and boosting speeds.

"The merger will ensure the deployment of a robust 4G LTE network to 95% of the U.S. population, something neither company would achieve on its own," it reads. "Also, because of our compatible networks and spectrum, the customers of T-Mobile USA and AT&T will experience improved voice and data service almost immediately after the networks are integrated."

Customers were also advised that they should not wait to sign up with T-Mobile or upgrade their handset, as the company remains independent until the deal is approved. The company will also honor all contracted plans that are entered into before the change of ownership.

AT&T announced on Sunday its plans to acquire T-Mobile for $39 billion. The cash and stock deal, if approved, would give Deutsche Telekom, the owner of T-Mobile USA, an 8 percent stake in AT&T.