Dallas, Texas and Bonn, Germany – Since Apple’s iPhone debut in 2007, AT&T has been harshly criticized by numerous customers about their poor cellular network connection in cities such as New York City and San Francisco. The company’s been struggling to find a solution that will fix the connection, but hasn’t found one until now.
On Mar. 20, AT&T announced that both AT&T and Deutsche Telekom executives have agreed to a $39 Billion deal for AT&T to buy out T-Mobile. The agreement has been approved by both company’s Boards of Directors. The deal will deliver $19 Billion in cash and $25 Billion in stock to Deutsche Telekom.
Like Sprint, T-Mobile’s been struggling to compete with larger carriers such as AT&T and Verizon Wireless.
AT&T’s agreement with T-Mobile will not only make AT&T the largest cellular network carrier in the US with 25% more subscribers than Verizon, the current largest carrier, but the company has acknowledged that their goal is to improve network quality and data speed for both AT&T and T-Mobile customers.
The deal will help AT&T roll out faster speeds more quickly, including it’s upcoming 4G network. In AT&T’s press release, the company mentioned that the deal can help AT&T deploy 4G to 95% of the US. The company also mentioned that the carrier’s “mobile data traffic grew 8,000 percent over the past four years and it is expected by 2015 to be eight to 10 times what it was in 2010.”
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”
The news doesn’t change anything for T-Mobile’s customers immediately. Due to the long process, both companies estimate the acquisition will take a year to finalize. Once the deal has closed, all T-Mobile customers will get access to AT&T’s phones, including the iPhone.
René Obermann, CEO Deutsche Telekom, said, “We have achieved the best solution for our company, our customers and shareholders…. We will be able to focus more on the opportunities of a modern infrastructure in Germany and Europe, as well as in Internet products that accompanies to our strategy ‘fix, transform and innovate’…We will now focus our resources more on the ‘transform’ and ‘innovate’ blocks of our strategy in order to accelerate the transformation of Deutsche Telekom.”
ABC News reports that AT&T’s CEO said the company’s deal will require customers to switch to their phones, which means more monthly fees. But the executive noted that the company will work hard at keeping T-Mobile’s no-contract plans.
(Image courtesy of AT&T, Inc.)
