Verizon Wireless (
) can definitely hear them now.
) took a bold, $39 billion step towards becoming the largest
wireless service provider in the U.S., dramatically changing the
field of competition for mobile phone customers. If the merger of
AT&T and Deustche Telekom's T-Mobile U.S. unit receives
regulatory approval, it will make the combined firm the largest
wireless company in the U.S., with more than 125 million customers
to Verizon's 95 million or so.
This isn't about customers, though - it's about hardware.
AT&T's been battered by the perception that its towers can't
handle the flood of traffic from the iPhone, and Verizon's ads have
leaned heavily on the theme that its competitor can't deliver the
goods. In addition, the race is on to roll out a true "4G" wireless
network that offers broadband speeds on smartphones, and AT&T
can barely keep up with 3G demand.
The deal, if it goes through, will likely see AT&T dump a lot
of its traffic onto T-Mobile's towers, while possibly extending the
sale of devices like the
) iPhone 4 to T-Mobile customers.
In addition, closing this deal will consolidate the only two
GSM-band carriers in the States into a single unit. GSM is standard
in many overseas markets, but in the U.S it competes with CDMA,
which is employed by Sprint (
) and Verizon.
Sprint's shares plummeted on Monday - many expected it to cut a
deal with T-Mobile itself; while AT&T's and Deustche Telekom's