December 20, 2011 by staff
AT&T T-Mobile, AT&T yesterday killed its deal to purchase T-Mobile USA, which generated hurrahs from consumers, businesses, and government officials who saw the buyout as terrible for the US wireless industry.
I agree that the deal would have been, in general, user-hostile, but the aftermath leaves AT&T and T-Mobile in worse shape, and it’s caused confusion in the wireless — and wireless Internet — industry.
When AT&T in March announced its intention to purchase T-Mobile from Deutsche Telekom, I thought the deal would eventually go through. But the US Department of Justice (DoJ) and the Federal Communications Commission (FCC) didn’t buy AT&T’s ridiculous arguments that reducing the number of cellular competitors would increase competition and jobs and spark innovation.
In addition, massive grassroots efforts emerged by consumers and other organizations that saw T-Mobile as a scrappy competitor offering good airtime prices and excellent customer service. They didn’t want AT&T — with its abysmal customer service and expensive airtime plans — to kill a competitor.
As far as I’m concerned, the good guys (and gals) won. But now what?
AT&T Mobility LLC will continue to construct its US cellular network without T-Mobile. Indeed, one reason (of many) the buyout wasn’t approved by the DoJ and FCC was a memo by a law firm working for AT&T that said the cellular operator could expand its LTE (Long Term Evolution) network without T-Mobile’s spectrum, though the move wouldn’t be economically justified. Also, AT&T wants to purchase spectrum from Qualcomm’s defunct MediaFLO mobile television business, and I assume US regulators will approve that plan.
So I’m not crying for AT&T. I’m reserving some tears for T-Mobile, because the country’s smallest top-tier cellular operator really doesn’t have enough spectrum to roll out true 4G — that is, LTE. T-Mobile continues to call its HSPA+ network “America’s Largest 4G Network,” but it’s a lie. (See my video.) HSPA+ is 3G, although it’s much faster than older 3G technology.
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