Major moves for mobile (week in review)

AT&T and T-Mobile stole the news spotlight early in the week by announcing their proposed megamerger just as the wireless world was readying to converge on Florida for the annual CTIA trade show.

AT&T and T-Mobile, respectively the No. 2 and No. 4 U.S. wireless carriers, announced on Sunday a $39 billion merger deal that would create a company with nearly 130 million subscribers, easily leapfrogging Verizon Wireless for the No. 1 spot.

Winning regulatory approval, however, may be tricky. The Federal Communications Commission warned in a report last May that the wireless industry was becoming more concentrated and indicated that 60 percent of the nation’s subscribers and revenue come from the country’s two largest wireless providers: AT&T and Verizon Wireless.

In addition to the size of the combined subscriber bases, antitrust regulators are likely to be concerned that the deal will also merge the two largest GSM carriers in the U.S., giving customers only one carrier to choose from if they want to use that wireless standard. GSM is the dominant global wireless technology and the standard in Europe, meaning U.S. cell phone users who travel frequently will need to carry one of AT&T’s phones.

The deal will also give T-Mobile users access to a planned 4G wireless network using LTE, or Long Term Evolution technology. T-Mobile has HSPA+, which delivers 4G-like speeds, but it’s not a real 4G technology and the company hasn’t announced any plans for network expansion beyond HSPA+.

As for customers, while the move leaves them with fewer choices, current AT&T and T-Mobile customers may experience improved service quality. AT&T maintains that buying T-Mobile will bring next-gen mobile networks to more Americans at a quicker clip and make the United States more competitive.
And of course Sprint Nextel may find it difficult to compete on its own if the deal between AT&T and T-Mobile is eventually approved by regulators.

See our roundup for complete coverage of the merger and its potential impact on consumers and the mobile industry.

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