AT&T To Merge With T-Mobile USA?

April 14, 2011 - PRLog -- AT&T is planning a $39bn deal in stocks and shares to merge with T-Mobile which will hand them control of over 40% of U.S. wireless subscribers. Deutsche Telekom, T-Mobile’s parent company, will receive an 8% stake in AT&T if the deal goes through. The deal will effectively eradicate any major competition for AT&T in the U.S. which has raised question over the ramifications for customers. Less competition could mean higher bills and longer contracts; particularly as T-Mobile is one of the main suppliers of cheaper deals.

Further issues for consumers may include confliction over data. T-Mobile currently offers unlimited data use for a fixed monthly price whereas AT&T caps data use. AT&T is also known for sporadically blocking major internet sites such as Google and Skype where T-Mobile has always granted access. Such questions have created an air of doubt and uncertainty for consumers.

It is thought the merger could slow down expansion rates for both T-Mobile and AT&T which will have additional knock-on effects for the consumer. Experts at Pretium Ventures predict the deal will cost T-Mobile a considerable number of customers, if it goes through, due to the number of questions the deal has raised for consumers.

As the experts at Pretium Ventures have suggested, the deal may not ever come to fruition. It will be subject to the usual bureaucratic stipulations. It will require the approval of regulators such as, the Federal Communications Commission and the department of justice, as well as requiring shareholder authorisation. It is expected the deal will take approximately twelve months to go through due to rigorous processing procedures.

Despite the deal taking an estimated twelve months to process, it is questionable as to whether this deal will ever be sanctioned. If it is actualised, AT&T will monopolise the market, creating a vacuum of choice for consumers. Combined T-Mobile and AT&T have approximately 129 million subscribers whereas competition Verizon has 102.2 million customers. Together, AT&T and Verizon will control over 80% of the market and a GSM monopoly will be created in America. Questions have been raised as to whether or not the Federal Communications Commission will allow this deal to go through due to its monopolisation of the market. If it fails however, T-Mobile needn’t worry as they will still receive a massive $3bn as compensation.

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About Pretium Ventures:
Pretium Ventures is a Hong Kong based investment firm that specializes in promoting successful growth of young companies. As a venture Capital firm Pretium Ventures is unique in their client centric approach to supporting the growth of businesses as well as their ability to cater to small to medium sized individual and institutional investors. - http://www.pretiumventures.com