pavyedav | boredom and inherent curiosity, in one

Today the Department of Justice filed a lawsuit to block AT&T’s acquisition of T-Mobile. As far as I can remember, this is the only time I’ve ever seen a major corporate deal halted by the government. It’s not over just yet, but it seems more and more likely that AT&T will not be able to acquire T-Mobile, which is very much a victory for consumers since T-Mobile has always used competitive pricing to attract customers.

What this means: If this block is successful, AT&T is in a bit of trouble. Apparently T-Mobile will receive a portion of AT&T’s existing wireless spectrum and reduced roaming rates on AT&T’s spectrum. AT&T will also lose the very important 1700 MHz spectrum of T-Mobile’s that it was planning to use for LTE deployment. This is a big blow to AT&T’s future infrastructure, so there better have been a plan B for them if the deal did not go through. The company will fall further behind in 4G deployment, so they will probably lose customers in the coming year. Apart from spectrum, AT&T will also lose cash, which obviously is never good.

I think the biggest winner - again, if the block is successful - is Sprint. Sprint always had competitive pricing plans, and with their rapid 4G deployment, they looked to make moves to compete with Verizon as the future of fast cellular service. AT&T had fallen behind in infrastructure changes, so this deal was to get back into the 4G deployment race. If it doesn’t go through, Sprint will get a boost from unsatisfied AT&T customers.

I’ve written before that AT&T would not be hurt too much if this deal didn’t go through, but obviously it doesn’t help them. They now need to shore up their 4G LTE deployments quickly and make sure that handset makers are also slow to make quality 4G handsets. They’ve been playing second mover in the 4G implementation race for too long, so this block may be a call to action to start making internal changes quickly. AT&T better have a strong LTE infrastructure by the time iPhone 6 comes out; otherwise, they will lose customers by the droves.