AT&T Bids for T-Mobile U.S.
Today, AT&T announced an agreement to buy T-Mobile U.S. for $39B in cash and stock. If approved by regulators in the U.S., Germany and Europe, it will create the largest mobile provider in the U.S., and provides the new carrier with sufficient scale to move to LTE post-haste. As many customers undoubtedly noticed, both GSM carriers had resisted this move, but Verizon Wireless’ aggressive deployment of LTE radically and rapidly re-altered the competitive U.S. landscape. The prospective consolidation of this country’s two largest GSM providers does so once again.
These recent events will influence far more than the U.S. market, because two international rivals, Vodafone (which has a large minority stake in Verizon Wireless) and Deutsch Telekom AG (which owns T-Mobile U.S. and will own 8% of AT&T), will each possess a vested interest in U.S. LTE deployments, offers, operations, migration, and customer support that can be applied directly to their home markets (and other major international markets in which each operates), giving both of these mobile operators potentially considerable advantage in learned experience compared to other rivals.
While AT&T and T-Mobile U.S. customers will view this announcement with mixed-positive reaction, it’s important that would-be LTE users appreciate that the roll-out of networks, products, and other essential infrastructure is not infinitely malleable or adjustable. Thus, regardless of provider, one can expect availability of any LTE service to be spotty for some period of time to come (2+ years). And as we’ve already seen, it’s entirely possible that service availability in certain cities will also be accompanied by congestion. Thus it is imperative that customers seek out mobile service plans, devices and providers that support 2G, WiFi, 3G and 4G/LTE.
Moreover, the handoff between LTE and other wireless technologies should be seamless, and occur on a timely basis. In that regard, GSM and CDMA networks are unequal, because the 3GPP (Third Generation Partnership Project) has created a standard process for GSM providers to support 2G-4G (voice) handoffs (for background on UC and Voice over LTE see my earlier blog at http://blog.ucstrategies.com/index.php/2011/02/22/why-volte-matters-to-uc/). Prospective GSM customers should not assume their carrier has implemented the 3GPP’s specifications, they must verify. Similarly, CDMA customers should request similar information from those mobile operators—because these carriers could elect to implement proprietary solutions. But over the next several years, it is essential that all VoLTE customers use mobile providers that have implemented 2G-VoLTE handoffs throughout their networks, in a manner that makes the handoff un-noticeable (e.g., apart from the support of IP-only features on an end-end basis, the handoffs should be very rapid, and supported by a highly redundant, diverse and scalable backoffice infrastructure).