This week the US Justice Department moved to block the proposed merger between AT&T and T-Mobile. T-Mobile offered itself for purchase due in part to a lack of a 4G strategy which had them facing massive network upgrade charges to remain competitive as most operators in the US roll out 4G service.
If the merger is successfully blocked, here’s who loses:
– T-Mobile – no 4G strategy, facing massive network upgrade charges
– AT&T – a reported record-breaking $6B (15%) breakup fee
– AT&T – the top donor to Congress, money not so well spent if it can’t get what it wants
– Apple – loss of the massive auto influx of customers under the AT&T umbrella, meaning that if it wants to reach T-Mobile customers, it will have to do a separate deal
And the winners:
– Sprint – it never wanted this to happen anyway, plus, it may get the iPhone 5 in October
– Consumers – greater selection of smartphones
– Android – T-Mobile doesn’t carry the iPhone and for the near future the best phones available are the high-end smartphones like the recently announced Samsung Galaxy S2
– Clear – a fledgling/struggling 4G provider in the US, backed by Comcast, Google, etc. They are Sprint’s 4G service provider and now that T-Mobile is without a 4G strategy, there’s a clear opportunity to provide service to T-Mobile
For a brief history lesson, you can find the Ma Bell family tree after the historic breakup of AT&T in 1984 right here.