What the AT&T and T-Mobile Merger Means for the iPhone

By , Mar 21, 2011

Well, no one saw that coming. Out of nowhere, AT&T has bought T-Mobile and become the largest wireless provider in the U.S.

It was originally thought that Sprint and T-Mobile would merge, but network incompatibilities made that idea look less and less attractive. Instead, AT&T and T-Mobile have shacked up to become the big kid on the block. Combined, AT&T and T-Mobile account for 130 million wireless customers in the United States, blowing by Verizon’s 90 million users.

The question on our mind is: What does this all mean for the iPhone? LTE? What if we actually start getting reception in our own homes…

From the AT&T press release,

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”

LTE/4G has been the hot topic in the mobile market, and carriers are scrambling to show off their 4G capabilities and handsets. AT&T has been sinking under the weight of iPhone saturation, and I’m sure they’re secretly relieved that Verizon is there to share some of the bandwidth load.

[Image via 9to5 Mac]

Apple has two versions of the iPhone 4: the GSM/HSPA model on AT&T, and the CDMA model on Verizon. AT&T and T-Mobile both use GSM/HSPA technology, but they currently operate on different frequencies.

This means that T-Mobile cannot, given the current infrastructure, support the iPhone on its own towers. Once T-Mobile’s towers switch frequencies, the current AT&T iPhone should be able to operate on T-Mobile.

AT&T will of course be adding T-Mobile’s spectrum to their own in due time, but it is currently unclear how it will all play out. AT&T remained vaguely promising in the press release,

“Stephenson continued, “This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America.”

It is also worth noting that this merger is estimated at taking a year to finalize. This means that we won’t see any signs of T-Mobile’s presence on AT&T until at least 2012. The iPhone 5 will be on the market before then, so don’t get your hopes up for a LTE iPhone this summer.

What about the iPhone 6? T-Mobile is not totally dissolving into AT&T. They say so in their press release,

“T-Mobile USA remains an independent company. The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G.”

T-Mobile has said that its users won’t be getting the iPhone anytime soon, but there’s no reason we won’t see next year’s model with 4G on T-Mobile/AT&T’s combined network. What happens in about 12 months? An iPhone announcement at the 2012 WWDC conference.

Once T-Mobile is merged with AT&T, there will be only one GSM iPhone provider in the United States. Monopolies always scare me, but I have to remember that Verizon still has the iPhone too. A Sprint-Verizon deal could be a possible counterattack to AT&T’s move; then there would only be two big players in the U.S. wireless market.

[Image via Mashable]

The most obvious benefit to this merge with T-Mobile is more bandwidth. Even though some people are trickling to the iPhone on Verizon, AT&T still has to deal with a massive amount of network strain. iPhone users consume more data than any other smartphone demographic, and AT&T has had to deal with millions of iPhone data hogs (myself included) since its original exclusivity agreement with Apple in 2007.

T-Mobile boasts a pretty sophisticated (and relatively unstrained) spectrum of bandwidth that AT&T will be able to pull from. Besides better data speeds and “95%” 4G coverage for customers (what AT&T is claiming), the extra T-Mobile towers should drastically improve the bad coverage that AT&T has in certain parts of the country.

From AppleInsider,

“Both AT&T and T-Mobile have already begun building out HSPA+, the latest generation of GSM/3GPP mobile networking supporting data speeds of up to 21Mbps (as some European carriers have been operating for years). Existing AT&T iPhone 4 models support 7Mbps data downloads, and HSPA+ networks can be backwardly compatible with them; new iPhone 5 models are expected to be able to take full advantage of the fast new network.”

AT&T’s press release says that this merge, “will increase AT&T’s network density by approximately 30 percent in some of its most populated areas, while avoiding the need to construct additional cell towers.”

Questions have been raised as to why AT&T didn’t spend the $39 billion on building up its own infrastructure, instead of just buying T-Mobile. The simple answer is that it’s much more difficult to build up your own backend than just buy and absorb another. Permits for cell towers take years to get approved, and it’s going to be much faster and easier for AT&T to start using T-Mobile’s already-existing infrastructure.

By merging with T-Mobile, AT&T will gain the equivalent of five years of expansion in under one year.

I’m optimistic about this AT&T/T-Mobile deal. We’ll most likely be seeing an LTE iPhone next year!

What do you think about all this news? Are you excited for the merge with AT&T and T-Mobile? Share your thoughts below.

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  • Jason Masters

    Att already screws with customers using mywi and your excited WTF? This blog sounds bipolar!

  • http://n/a Pepo787

    Excited!!

  • Bytenapple

    I disagree Jason. This blog states the facts both positive and negative and then the writer states his opinion which he is entitled to. Alex, keep up the good work. iPhone Download Blog is the best and I keep up with about 15 tech sites a day.

    • Jason Masters

      Well we can agree to disagree I just read one post about the crackdown on mywi and another about being excited I mean how can you be excited about a company who treats their customers so bad you blog about it ? Do you see the irony here?

  • Bytenapple

    I see where your coming from
    Jason being upset about not being able to freely use mywi anymore like we all are. But actually as much as it was disapointing that mywi is being watched now by AT&T, we were some cool features for free that in the long run were immobilizing AT&T’s data network infrastructure due to the heavy constrain users. I myself loved the all you can eat tethering but in the end would prefer to have a more robust, efficient network. my brother travelled over to Europe and noticed that their networks were always speedy and seamlessly integrated. This made his overall overall user experience better in all aspects. Yes, change is hard and seems like a bummer in the beginning but sometimes we just need to wait and see the results.

  • Bytenapple

    Sorry for all the grammatical errors. I was typing too fast on my iPhone keyboard.

    • Jason Masters

      I’m extremely skeptical when it comes to trusting these companies their record speaks for themselves.

  • http://scorintha.posterous.com Mark Nyon

    There seems to be some wishful thinking in this article.

    “Once T-Mobile’s towers switch frequencies, the current AT&T iPhone should be able to operate on T-Mobile.”

    If T-Mobile were to switch the frequencies on the cell towers, it means that all 33.4 T-Mobile customers would no longer be able to use 3G/4G service on their phones.

    If I were an AT&T customer, I’d probably be excited, but as a T-Mobile customer, I feel pretty down on the whole thing.

  • http://scorintha.posterous.com Mark Nyon

    Oops, I meant 33.4 million T-Mobile customers.

  • http://aasif.99k.org aasif

    It makes sense for T-Mobile. Deutsche Telekom has been trying to unload T-Mobile USA for a while now, and it was probably just a matter of time until they found a buyer. I don’t think they’re interested in being the the fourth biggest player in any market. Despite rebadging HSPA+ as 4G and calling itself “America’s Largest 4G Network”, T-Mobile doesn’t actually have any plans to deploy LTE — they simply don’t own the spectrum for it — and so was going to hit a wall sooner or later. With subscriber growth down and average revenue per user way below that of AT&T and Verizon, DT had to decide whether it wanted to cut its losses or find billions and billions of dollars to invest in building a true 4G network to stay competitive. Seems like an easy call, all things considered.

  • DAN

    The REALl question for us current AT&T broadband hogs is WHEN will we see this 30% dynamic speed increase along w/bandwith pressure release? :-p

  • DAN

    The REAL question for us current AT&T broadband hogs is WHEN will we see this 30% dynamic speed increase along w/bandwith pressure release? :-p

  • Bytenapple

    One year at the least and two at the m

  • Bytenapple

    oops..most

  • QT

    I HATE T-mobile!!!!! This merge might actually move me to verizon!

  • QT

    T-mobile sucks

  • sOleFresh

    some people cry and complain to much; get over it…its gunna happen whether you like it or not..
    thumbs-up on the article. im really excited to see what happens!

    • Jason Masters

      Yeah so we can still rant and rave thats the beauty of freedom of expression !
      May I ask what are you excited about or were you just stirring the pot?
      Be specific please?

      • sOleFresh

        im excited to see what types of changes this will lead to in the wireless service industry. i was following the story about sprint possible buying t-mobile and out of nowhere AT&T did. Being an AT&T employee myself i i didnt hear anything about it until it got to the media..

  • http://www.ititothemes.wordpress.com iTito

    It means were all loosing our unlimited Data plans period.

  • AT&TMobile vs. Sprizon

    So now we (most likely if Verizon buys Sprint) hae two carriers, one CDMA, Sprizon, and one GSM, AT&TMobile. Now we can stop worrying about the unlocks because iPhone will be on all carriers.

    • http://unratedstudios.com Michael

      lmao… Sprizon… but id rather it be switched because right now Verizon and ATT compete for the highest deposit ever compared to Sprints largest which is 250 bucks

  • Marty

    Monopoly of the industry will hurt customers eventually. The American economy is like a monopoly game playing out; In the end there will be only a few “winner” monopolies. Whatever technical benefits will be overshadowed by corporate greed.

  • APB20

    Everyone is talking as if this is a done deal. The FCC has to aprove this first and that may be far fetched. Verizon buying Altell almost didnt go through and Altell was no were near the size of T-Mobile. I think there is a very good chance that this deal will not go through at all. Then AT&T is out 3 billion and has to give up some of its spectrum to T-Mobile.

  • cesar robles

    Come on guys I’ve been reading a few blogs and everybody is caping on at&t its not that bad! T-mobile if your on a budget yea that would be the choice right? But how about at&t had the cheaper rates? My point is if at&t merging with t-mobile it goin too have more converge over all ,and I agree that maybe when that happends t-mobile costumers will probably loose that cheaper rate welcome to the real life guys!!! Or at&t can give people a break and having well over 90 million more people then version if merger happends…give us a better rate cheaper then version sprint is out so it could be a good thing so better rate! Better service!!! More converge!!! For a better price better then version at&t will want version costumers tell you that much…but maybe I’m saying this for my own interest we got to see what happends…

    • Jason Masters

      You make no sense and have no idea what your talking about !
      Get a clue moron what Tmobile customers don’t live in reality because we get great deals your a retard. Please do us a favor and either learn what your talking about first or stfu!

  • http://www.newitworld.com Iphone app

    I like your report about Iphone

  • Robert

    Well, well! I left At&t and went to T-Mobile. At&t always had a signal now i don’t have one at my place of work so this merge would actually benefit me cuz now I would have a better cell signal. And 1 point I’d like to make is that my wife had cingular and all they had to do was send all cingular users a new simcard ( and she kept her current plan at the time. T-Mobile users have nothing to loose in this!

  • Rich

    So when will VZW stop denying it and buy Sprint. Then we will be back to A amd B carriers like we were when Analog first started.

  • About

    If this merger goes through we might as well say good bye to innovation and watch as the US economy plummets even further. We’ll have to see how things unfold but I doubt the government is really foolish enough to allow something this crazy to pass. 2 companies controlling 80% of the market doesn’t sound very innovative. Not to mention the further loss of jobs. At&t only wants to merge with t-mobile because without their precious I-phone they really have nothing to offer. Bad customer support + bad reception.

  • teev

    Now I understand why T-Mobile was treating me like crap and said that they don’t have to take care of their customers now or in the future. My jaw dropped; been with them for five years. People have their own opinions about customer service from all cell companies. I switched to ATT because of tmobile”s rudeness towards me. Glad I did. I get reception Everywhere I go unlike tmobile. No dropped calls either. I personally have not experienced bad customer service from ATT so far. Been with them for almost 2 months now. My friend has been with them for over 10 years and does not have any horror stories about them. T-mobile didn’t care anymore and took it out on me and I’m pretty sure others. I know I am not the only one, whether others would like to admit it or not. Ridiculous!

  • Lenora

    My question, after switching from AT&T to T-Mobile paying the outrageous early termination fee, I ended up with a brand spanking new Iphone4. Should I sell it on eBay or hold onto it till after the merger?