AT&T Continues to Pursue Merger With T-Mobile, Submits Proposal to FCC

April 23, 2011
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Most recently, Sprint released an official announcement that they are going to join the Rural Carrier Association (RCA) in order to help them prevent AT&T and T-Mobile’s merger. However, in the face of their relentless objections, AT&T is still continuing to pursue its merger with T-Mobile and has submitted their deal to the FCC. Many critics argue that the merger would put Sprint out of business in the wireless industry as Verizon and AT&T would surface as the only worthwhile competitors. On the other hand, AT&T is ready to contend that merging with T-Mobile will let them bring 4G LTE services to 97% of the US, following the ever increasing demand for wireless. But, one FCC official does not believe the proposal will be approved, and this tells us that this deal will not be that simple. Without a doubt, this is one of the most critical decisions  the FCC has had to make in a long time.

AT&T Inc. (NYSE: T) today filed with the Federal Communications Commission its Public Interest Statement regarding its proposed acquisition of T-Mobile USA. The filing demonstrates the numerous benefits of the merger, including the deployment of 4G LTE network technology to more than 97 percent of the population. When the parties announced this transaction in March 2011, AT&T initially stated that it would deploy LTE to 95 percent of the U.S. population. After conducting a more refined analysis of the combined network, AT&T is increasing the scope of this commitment to 97.3 percent. This deployment will help fulfill this Administration’s pledge to connect every part of America to the digital age, and it will create new jobs and economic growth in the small towns and rural communities that need them most.

 

The publicly available filing, with certain portions containing competitively confidential information redacted, is available at www.MobilizeEverything.com.

 

Additional highlights of the filing include:

 

  • AT&T has helped make the United States the global leader in mobile broadband and smartphone sales. AT&T’s mobile broadband leadership, however, presents it with unique spectrum and capacity challenges. A smartphone generates 24 times the mobile data traffic of a conventional wireless phone, and the explosively popular iPad and similar tablet devices can generate traffic comparable to or even greater than a smartphone. AT&T’s mobile data volumes surged by a staggering 8,000% from 2007 to 2010, and as a result, AT&T faces network capacity constraints more severe than those of any other wireless provider.
  • AT&T is using up its spectrum at an accelerating rate, and the wireless broadband revolution is just beginning.  Over the next five years, data usage on AT&T’s network is projected to skyrocket as customers “mobilize” all of their communications activities, from streaming HD video and cloud computing to a range of M2M applications like energy management, fleet tracking, and remote health monitoring. In just the first five-to-seven weeks of 2015, AT&T expects to carry all of the mobile traffic volume it carried during 2010.
  • This merger provides by far the surest, fastest and most efficient solution to that challenge. The network synergies of this transaction will free up new capacity – the functional equivalent of new spectrum – in the many urban, suburban and rural wireless markets where escalating broadband usage is fast consuming existing capacity.
  • This transaction will thus benefit consumers by reducing the number of dropped and blocked calls, increasing data speeds, improving in-building coverage, and dramatically expanding deployment of next-generation mobile technology.
  • The transaction’s benefits arise from the uniquely complementary nature of AT&T and T-Mobile’s GSM/HSPA+ technologies and spectrum holdings.
  • The combined company expects to integrate a significant portion of T-Mobile cell sites into the AT&T network.  Upon network integration, which will benefit customers in as little as nine months, this will equate to “instant” cell splits – increasing cell density and effectively doubling the amount of network traffic that can be carried using existing spectrum in the areas served by those cell sites.
  • Groups across the political spectrum, including a broad range of consumer, disability, civil rights, and rural advocacy groups have highlighted the transaction’s potential to empower consumers, workers and small businesses to participate more fully in our nation’s broadband society.
  • The U.S. wireless marketplace is fiercely competitive, characterized by escalating usage, product differentiation, rapid innovation, fierce advertising campaigns, new entry, and sharply declining prices for wireless service by unit of consumption (e.g., minutes or megabytes). In fact, the FCC found last year that approximately three-quarters of Americans live in localities contested by at least five facilities-based wireless providers.1 These other competitors are rapidly growing and investing and will ensure the wireless marketplace remains vibrantly competitive after the transaction.

Imagine AT&T and T-Mobile as one. What do you guys think can they bring to the wireless industry? The real question is – will it be good for consumers?

Source: AT&T

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