T-Mobile’s Merger‎: Pros and cons

There are a lot of talks around two giants: AT&T and TMobile, West Virginia’s Public Service Commission last Friday approved US ‘s largest pr

ovider of fixed telephony AT&T’s merger with the German giant  T-Mobile, becoming the third state utilities commission to greenlight the $39 billion deal. California and Hawaii are still reviewing the transaction.

On April  21, 2011, AT&T,  Inc. (AT&T) and T-Mobile USA,  Inc.  (T-Mobile)  (together Petitioners)  filed in the alternative for either Commission consent to a purchase agreement where  AT&T will acquire T-Mobile from Deutsche Telekom AG for $39 billion in cash and stock or for a waiver of approval under W.Va. Code 524-2-12. T-Mobile has a limited West Virginia presence with a total of three owned cellular towers, equipment on twenty-seven others, no West Virginia employees and a total of 2,300 customers in this State.  AT&T has a substantial presence in West Virginia including wireline and wireless  offerings.  The Petitioners assert that the purchase will benefit current West Virginia AT&T customers by allowing the combined entity to make larger investments in new cellular infrastructure throughout West Virginia.

People have mixed emotions about the deal, lets have a look at both bright and dark sides of the deal:

Positives:

  • The merger will create new capacity for the combined company, leading to better phone service and faster data downloads for consumers.
  • AT&T’s commitment to deploy “Long-Term Evolution” wireless broadband to more than 97 percent of the U.S. population as a result of the merger
  • There are significant economic and public benefits to this merger

Negatives:

  • the deal will put too much power in the hands of one carrier (and one GSM carrier at that), it will reduce customer choice and innovation
  • It will lead to higher prices and poorer customer service
  • There are chances that T-Mobile’s gutsy approach to expanding its smartphone lineup will be killed by AT&T’s stodgier culture

While on one hand few users are of view that: “T-mobile is a dying company, financially speaking; which is why they agreed to merge with AT&T. This merger will only save jobs at T-mobile”

On the other hand few people have opinions like this “. I had been treated by AT&T like a second-rate citizen. T-Mobile’s catch phrase is “Stick Together”. I, for one welcome a company that treats me like I am important to them. If anyone from T-Mobile is reading this, please reconsider selling out to AT&T. You have loyal customers who have enjoyed your service. Selling out is like leaving your customer’s to the wolves”

So this debate will go on all we can do is wait for the consequence. Let’s see which side wins.

 

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