By Wilson Rothman
The Department of Justice is trying to put the kibosh on AT&T's proposed buy-out of T-Mobile, saying it would result in "higher prices, fewer choices and lower quality products for mobile wireless services."a
While this is true, it's just as likely that the damage is already done. Why would a phone shopper commit to a two-year contract with a troubled carrier, whose parent company shows little interest in improving? Either outcome seems equally dismal, at least in the near term, from the user perspective.a
T-Mobile is a decent fourth-place carrier, with excellent pricing and a higher speed 4G network that has held its own against the larger carriers. Subscribers who live in big cities, where T-Mobile's coverage is concentrated, experience satisfactory performance and are fairly positive on customer service.a
On the flipside, AT&T has well-known performance problems, from notoriously persistent iPhone call drops to a so-called "4G" network that in many markets shows no speed advantage over the 3G network, despite promotion suggesting the contrary.a
The merger was supposed to layer T-Mobile's network on top of AT&T's compatible, larger, but not-quite-so-organized one. I'm no network engineer, but it seems like reasonable proposal to bring desperately needed improvements to AT&T's massive audience. Still ...a
If AT&T gets permission to buy T-Mobile:a
There's a good chance we lose the great discount pricing that makes T-Mobile stand out. There's no guarantee of any kind of network performance boost in the immediate future. The merger could trigger a counter-merger, where Verizon Wireless tries to swallow Sprint whole, reducing the number of serious national carriers to just two.
The government's fears are reasonable, not only because of the immediate reduction of choices, but the potentially more hazardous long-term outlook. Still, the damage may already be done. Who wants to be a T-Mobile subscriber now?a
If AT&T's purchase of T-Mobile gets blocked:a
Subscribers will continue to feel uncertainty about signing on with T-Mobile. T-Mobile's network upgrades may be less frequent, as its corporate parent, Deutsche Telekom, grows tired of pouring money into it. The discounted pricing that gives T-Mobile cachet may not sustain — fellow discount-friendly carrier Sprint was forced to raise its smartphone plan pricing to stay afloat. AT&T's network may continue to experience technical difficulties, and its 4G strategy may continue to stall.
Besides competitive pricing, T-Mobile's biggest boon is its huge selection of great Android phones. To top that, there's even a chance that the next iPhone will turn up in its stores. But even this wouldn't be a coup: The carrier would get it along with Sprint, Verizon and longtime iPhone seller AT&T.a
There are murmurs that T-Mobile could merge with Sprint instead. Subscriber-wise, third and fourth place could combine to form a nice-sized third contender. However, the technologies of the two companies are wildly different, and Sprint still suffers for having acquired the incompatible Nextel. (There's also talk that Sprint might join with Metro PCS, which makes a tad more sense.)a
Regardless of whether this deal goes through, the customer may have already lost.a
More on AT&T and T-Mobile from msnbc.com:a
US seeks to block AT&T, T-Mobile deal Carriers' lofty claims of 4G speed put to the test AT&T texting plan: $20, not $10, for new customers AT&T to buy T-Mobile from Deutsche Telekom
Catch up with Wilson on Twitter at @wjrothman, or on Google+. And join our conversation on Facebook.a
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