Over the weekend, AT&T announced that it will acquire T-Mobile for cash and stock valued at about $39 billion. The companies estimate that it will take 12 months to clear regulatory hurdles and handle the logistics of the merger. According to an article in The New York Times, combining AT&T's 95.5 million wireless customers wth T-Mobile's 33.7 million customers would account for roughly 42% of all wireless subscribers in the United States. (Verizon has around 31%, and a good part of the rest are Sprint customers.)
What does this mean for the iPhone? Recent T-Mobile ads have made fun of the iPhone, trying to argue that while the iPhone was on AT&T and Verizon, T-Mobile is better because it offers "4G." I put that in quotes because there is considerable debate over whether it is fair to call the HSPA+ service offered by T-Mobile 4G service because while it is faster than traditional 3G service, it is not as fast as the LTE technology that both AT&T and Verizon call 4G.
One of the first thoughts that many had after the announcement of the merger was whether this means that the iPhone will be coming to T-Mobile subscribers. Not so fast, says T-Mobile itself, which posted this Q&A on a FAQ page on its website:
Is T-Mobile USA getting the iPhone?
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.
I think that simply means that during this transition period, T-Mobile isn't getting the iPhone. (I'm sure T-Mobile wishes that this were not the case; the CEO of Germany's Deutsche Telekom AG, the parent company of T-Mobile, admitted last year that the lack of the iPhone has hurt T-Mobile's business.) But once the acquisition is complete (assuming that it goes through), then I think it is obvious that T-Mobile customers will be AT&T customers and thus will have access to all AT&T devices, including the iPhone. I suspect that the ability to get the iPhone in the future was one of the reasons that T-Mobile considered it worthwhile to be acquired by AT&T. For the next 12 months, though, if you are a T-Mobile customer who wants an iPhone, you're going to need to make the switch now to AT&T (which it appears you will soon being doing anyway) or Verizon.
Will this acquisition have any benefits for current AT&T iPhone users? Perhaps. AT&T and T-Mobile are the two carriers in the U.S. who use GSM, although the way that they handle 3G is different so if you put a T-Mobile SIM in an AT&T iPhone and enable it by jailbreaking the iPhone, you can only take advantage of the slow Edge network on T-Mobile. But even though the current GSM 3G technology is not compatible, perhaps AT&T can find a way to make it work together. When the iPhone 5 (or whatever it will be called) comes out in a few months, perhaps it will have a way to take advantage of faster flavors of 3G.
Most likely, however, the main potential benefit of the acquisition to current AT&T iPhone customers will come in the future. AT&T (like Verizon) is just starting its 4G LTE roll out. I doubt that this 2011 version of the iPhone will take advantage of 4G, but I suspect that the 2012 iPhone will. By adding 4G LTE not only to all of the AT&T towers and spectrum but also the T-Mobile towers and spectrum, I hope that AT&T will be able to provide better 4G coverage to even more people, including those who are in areas that currently have T-Mobile service but little to no AT&T service. Randall Stephenson, the chairman and CEO of AT&T, alluded to this when he said that the acquisition of T-Mobile "will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people."
