Analyst predicts AT&T will offer competitive plan prices to win regulatory approval for the merger

Analyst predicts AT&T will offer competitive plan prices to win regulatory approval for the merger
AT&T will be facing thorough regulator scrutiny on account of its T-Mobile buyout, since it will leave the most visible cell phone market in the world with only one huge GSM carrier. The complete move to LTE won't happen overnight, so this would still matter to the Department of Justice and the Federal Communications Commission, which will be reviewing the deal.

Jonathan Chaplin, an analyst with Credit Suisse, is psyched about the deal, but says that the regulatory hurdles for it to be rammed through are "enormous", and that he has "never seen a deal with more regulatory risk be attempted in the US". That being said, AT&T has probably consulted with the authorities before it started coining out the offer for T-Mobile, and is probably willing to make "massive divestitures and concessions", Chaplin says.

We couldn't agree more, and there is a great chance that the pricing for AT&T services will actually go down. This might sound counter-intuitive for a newly-minted monopoly over the GSM market, but first, AT&T will be able to afford it now, with all the synergies it can achieve using T-Mobile's towers and spectrum, joint marketing and retail stores, etc. Second, it will be very closely watched by regulators, so it must give them a compelling reason to approve the deal, and what's better than showing it will actually lower prices for consumers, both in the short run, and when the LTE network is fully rolled out.

AT&T is emphasizing on the fact that the two carriers combined will invest more than $8 billion in the next-gen 4G LTE network, including coverage in hard to reach rural areas, which has been Verizon's and rural carriers' stronghold before. We are already seeing Verizon lowering its LTE plan prices to undercut AT&T's 4G network, when it is completely operational.

The interesting thing is what will happen with the handset variety - it will probably diminish slightly, as there will be no incentive now for T-Mo to maintain its rich Android portfolio in order to differentiate itself, but, on the other hand, manufacturers will be eager to please the largest US carrier, so we are drooling at the thought what phones they will come up with for AT&T now.

via Forbes



20. fairly_mismatched unregistered

I don't see how they can... they're paying out almost $40B to Deutsch Telekom for T-Mobile, and they're going to have change over all of their cell towers to LTE technology. If they had planned on using T-Mo's towers to support their HSPA+ "4G" in the interim the're still gonna have spend some time and money changing over those towers to match their own towers as they use different frequencies. AT&T should have been spending their money on improving their infrastructure years ago instead of trying to do it all now which is why they're running into regulatory issues. All these changeovers now are gonna cost them some serious capital.

17. midnight98

Posts: 5; Member since: Jan 27, 2011

Everyone feels that T-Mo customers will be the biggest loser and as a T-Mo customer, I thought like that once I heard the news. But once I checked At&t site and the plans and features that they have, I think the biggest loser will be Verizon. My reason is quite simple...for those that don't stay with T-Mo/At&t, they will go to Sprint, MetroPCS, US Cellular and Cricket cause they feel they will get the best plan for the right amount of money. Verizon is still extremely high for me. If I read the features right, I can get the unlimited calling and messaging to mobile feature with a 450 minute plan and my bill will only be $90 with 2MB data plan. I know its not unlimited but I don't call that many landlines and after using the data plan calculator, I am nowhere near 2MB. I guess it all depends on the customer.

19. midnight98

Posts: 5; Member since: Jan 27, 2011

Correction...meant to say 2GB.

16. joey18

Posts: 698; Member since: Jul 20, 2010

30 still hight price att ofers 10 unlimited dat basic phones and family plans my opinion verizon and att they have to ofer 20 unlimited data to all custumers .....verizon plan 59.99 text and 450 minutes voice plus 30 for data plus 7.99 insurence and taxes 10 you will pay 107.98 at month

15. Mooktar Koogan unregistered

AT&T is dogshit, all that wish for this will find out the hard way.

14. Socalvenom unregistered

Some of the main problems I see with this merge is for 1. Phone data, Everyone hates At&t's limited 2gb plan, to pay $10 for every 1gb after the first two is a rip off and a slap to the face. 2. T-mobile customers are used to Unlimited data,talk and text so for them to be cut short is definitely impossible. 3. Many people left At&t for one reason or another and to be places back in the hands of there hated phone provider is a" Oh Hell No" situation and hence they would switch to Sprint, Verizon or if to save money a pre paid service like Boost,Virgin or any other company. As an ex customer of T-mobile it's sad that they couldn't run their company but this is a corporate world and life moves on like it or not. I was actually considering switching from Sprint to At&t the other day but after many hours of thought and constant plan comparison I felt Sprint was the right service provider for me at this time,but who knows maybe later down the line I might change my mind even though At&t's going to have to pull a rabbit out of the hat for me to even think about it.

12. donpeppino9

Posts: 67; Member since: Jan 24, 2010

I hope this merger goes through. i think for many people, the choice in a cdma carrier is due to poor offerings from the two major gsm companies... att has high prices where as tmobile has poor coverage. Now that the two merged their prices will be more competitive and their coverage will be a lot better, if not excellent and on par with verizon. At this point i don't see why anybody would rather go to verizon. going with the new att you would get great service, great price, and access to the best in smartphones that are all international capable. no more dealing with esn's and locked devices. sim cards the way to go.

13. donpeppino9

Posts: 67; Member since: Jan 24, 2010

that and way better battery life.

10. Ashnnat

Posts: 15; Member since: Oct 18, 2010

"uhhh the big bad evil company is after me!! uh let me tied this Nike shoes so I can run away from them...uff I'm parched from all that running, let me have this tasty Coca-cola down while making sure that my american eagle shirt is not stained with sweat" "uh ho ho, is funny because they're all big companys!" "oh ho ho"

5. Das70

Posts: 124; Member since: Jan 05, 2011

Its just not worth having a smartphone on these big carriers anymore. ATT will play the price jumping game if they are allowed to get tmo. They may offer a little cheaper plans at first but not as good as tmo. Im either going to stay with a prepaid,(I got my first smartphone with metro as a temporary phone waiting for any new Blackberrys from TMO) OR I will just go back to Verizon and a basic phone. I can revert back to a basic phone. Im not that addicted to a smartphone. Plus when I realistically look at it, a smartphone doesnt do anything that my computer does, plus my computer does it better. But for now metro will suffice. Unlimited minutes, texting and data. $60 a month.The internet is a bit slow but dooable. Not one dropped called yet.

4. cellgeek82

Posts: 518; Member since: Dec 20, 2009

Verizon needs to keep their prices low, keep unlimited data, and buildout 4G a little faster. If AT&T is allowed to go through with this and greatly increase customers and coverage at the same time getting a boost on LTE and keeping prices low this is something Verizon should think about. Verizon won't be the big kid on the block anymore. If they start tiered data it won't run well with customers.

3. remixfa

Posts: 14605; Member since: Dec 19, 2008

your a tard. tea partiers arent anti regulation. they are anti OVER regulation which is what we have now. CDMA has longer range per tower and better building penetration. being the newest tech doesnt make u the best. Its also a near 50/50 split between gsm and cdma dominated countries in the world. Cant say i didnt see this merger comming and at least it makes sence compared to the sprint rumors, but BOOOOO. ATT may lower their prices, but they will never match Tmobile's current pricing and that is going to really hurt a lot of people who now dont have a choice in carriers. Sprint's pricing is only slightly cheaper than VZW at this point, and metro sucks. ATT didnt earn the moniker "evil empire" for no reason at all. Dont trust them.

8. BaiGanyo

Posts: 308; Member since: Feb 07, 2011

Um, yeah, they are against virtually all regulations. How is the wireless industry over regulated now? You're obviously an complete idiot if you defend the tea party nut cases.

11. donpeppino9

Posts: 67; Member since: Jan 24, 2010

ya but to the tea partiers, any regulation is over regulation. tea partiers are for completely free markets or close to it... which in modern day economics will spell disaster. as for cdma/gsm popularity among countries... 50/50? are you kidding? GSM is the way to go. you may argue signal quality among for cdma but you're forgetting that gsm's 3g technology, wcdma, is similar technology, but more advanced. To compare EVDO to gsm is comparing 3g to 2g. if you compare both 3g networks the answer is obvious... att's 3g trumps cdma 3g. it's fact, not opinion. I've experienced it first hand myself.

21. remixfa

Posts: 14605; Member since: Dec 19, 2008

lol. wow. 2 economic idiots. hey, its ok that u vote for obama.. someone had to. the free market is the most fair market their is. Everything is decided by you, the consumer. Of course, ur public school education and idiot friends have convinced you that thats all eeevil and u need the government to babysit you.

1. shinobi

Posts: 8; Member since: Feb 14, 2011

Sounds very interesting....See what's gonna happen in a nearest future ! Think Verizon and Sprint long time ago should switch from their 'last century'CDMA technology to GSM which will be much better...Should be close to European standard when new customer buying preferable phone first in a phone store (mean any brand with any features starting from very simple to smartphone like IPhone or Samsung Galaxy S or very rare Vertu) and only after this choosing a cell provider with a plan(minutes,data etc etc).

6. mister x unregistered

CDMA last century implying that GSM is leading Edge..Thanks I really needed a laugh..Time to bone up on wireless

9. donpeppino9

Posts: 67; Member since: Jan 24, 2010

cdma more advanced than gsm. but wcdma is more advanced than cdma. even back when vzw and sprint decided on cdma, had they known what future holds for cdma i'm sure they would of chose gsm, even if it meant less data capabilities at the time. wcdma > cdma > gsm

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