Poor-reception phone carrier AT&T will purchase T-Mobile from Deutsche Telekom for a cool $30 billion, it was announced over the weekend. While a regulatory review is in order, AT&T is confident that the mega-deal will be approved. According to Dan Frommer of Business Insider, their experience is practically reason enough:
It's true -- AT&T has executed more mega-mergers over the past 10 years than any company we can think of, including the original AT&T Wireless-Cingular deal, SBC-AT&T, and AT&T-BellSouth.AT&T believes its experience with regulatory review has given it a good picture of what's realistic and what isn't from an approval standpoint, and believes it can frame the deal in a way that won't be rejected.
Obviously, it will probably have to make some concessions -- maybe even some big ones. But it doesn't think the deal will be blocked. So T-Mobile's breakup fee -- if the deal doesn't go through -- is $3 billion in cash, a chunk of wireless spectrum, and a bigger roaming deal. That's pretty significant.
But what does this mean for consumers? Better coverage, or so says AT&T who claims ity will now be able to bring a 4G connection to 95 percent of the U.S. population. However, phone plan prices could soar. ABC reports:
[A]nalysts say that though the merger would expand nationwide 3G and 4G network coverage for cellphone users in the U.S., the reduced competition would mean fewer phone options and pricing plans over all.While the two companies will have to work out some technical differences in their telecom marriage, analysts said that the combination of the two networks would likely provide a strong nationwide network.
What does this mean for Verizon, the phone company that, for a short period of time, founds its place in the sun after finally selling iPhones? According to Technorati, Verizon could benefit from the merger is they do the following four things: Stay on message, comfort confused consumers, be the anti-corporate brand (ha!), and deliver service innovation.