T-Mobile Users Rejoice at Justice Dept. Blocking AT&T Merger

Mike Isaac
August 31, 2011
http://www.wired.com/gadgetlab/2011/08/att-tmobile-doj-merger-block

“I’m so happy that I don’t have to be an AT&T customer.”

Posted to a T-Mobile message board this morning, one user’s feelings nail the sentiment among consumers following Wednesday’s announcement that the Justice Department is suing to block AT&T’s proposed acquisition of the Deutsche-Telekom–owned wireless network.

T-Mobile users generally responded positively to the news that they wouldn’t be seeing the AT&T death star on their cellphone bills anytime soon. Riffing on the oft-bemoaned shortcomings of both networks, one Wired.com reader proposed an unfortunate merger scenario: ”AT&T’s zero-bars reception merged with T-Mobile’s customer service. I think the result might just collapse into a black hole of suck.”

AT&T has long championed its proposed merger of T-Mobile as being beneficial to the wireless customers of both networks. The company claims it will improve wireless service for AT&T and T-Mobile customers, expand 4G coverage to more of the country and, most recently, add a significant number of jobs to the U.S. workforce.

But in the Justice Department’s eyes — and anecdotally those of T-Mobile’s customer base as well — the costs of the merger may outweigh the benefits. “The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said deputy attorney general James M. Cole in the Justice filing.

Not to mention some of the concessions existing T-Mobile customers would have to make if the merger were to go through. AT&T has repeatedly stated it planned to use T-Mobile’s 1700-MHz spectrum for its eventual 4G LTE deployment. That would ultimately make T-Mobile customers buy new phones that could function on AT&T’s network — unless, that is, you’re okay with EDGE network service.

Those least happy about the Justice Department’s actions are, of course, AT&T and T-Mobile. In the past year, T-Mobile has seen a steady decline in profits as T-Mobile customer contracts have been reduced by nearly a million subscribers. If Deutsche Telekom were able to sell off T-Mobile to AT&T for $39 billion, the German firm could then use that money to invest in its European business.

Not to mention a successful blocking of the merger would prevent AT&T’s dreams of becoming the largest wireless telecommunications network in the United States, surpassing Verizon as the reigning champ and leaving Sprint in the dust.

Of course, if the lawsuit fails to block the merger, today’s customer rejoicing could lend itself to tomorrow’s mass customer departures: “If AT&Terrible is able to acquire them,” wrote one T-Mobile subscriber, “then I am outta here so fast they won’t even know I existed.”