AT&T’s take on the T-Mobile merger

by Phil Hornshaw

Earlier this week, we published a story about some AT&T (T) customers who are working to stop the company from merging with smaller cellular carrier T-Mobile. But it seems not everyone has negative feelings about the merger – namely, AT&T.

I received an email yesterday from Steve Kerns of Fleishman Hillard, a public relations firm working on behalf of AT&T. Kerns pointed out that there is a lot of support for the AT&T/T-Mobile merger: as he put it, “26 governors, 76 Democractic members of Congress, 72 mayors and unions representing 20 million are all on record in support of the benefits this merger will bring to consumers, jobs and the economy.”

It can be tough to get around the noise of the Internet, which has largely taken a negative stance on the pending merger between the two telecom companies. Merging T-Mobile and AT&T would contract the field of potential wireless carriers even further than it already is. Some worry could leave customers with fewer options and paying higher rates, while network quality could also suffer as customers from the smaller carrier jump ship to AT&T’s network, which has been strained under the force of so many iPhone customers.

More coverage and LTE capabilities, says AT&T

Kerns’ email states that AT&T expects the merger to actually improve its LTE capabilities by rolling in T-Mobile’s network. The merger lets AT&T reach more than 97 percent of Americans, it states, and expands AT&T’s network by about a million square miles across the country. It can bring LTE coverage to more rural areas, and thereby about 55 million more Americans than have access to the technology now. AT&T also says that more LTE in more communities will create “businesses and jobs, and [facilitate] entrepreneurship.”

It makes sense that AT&T’s deal with T-Mobile would expand its coverage, but the LTE improvement is the real good news. Kerns also sent two press releases, one from Sen. Mike Lee, R-Utah, and one from the Communication Works of America, both of which supported the merger. Lee’s statement said that the senator thinks the merger deserves “careful review,” but it also included this quote:

“In my view, the merger has the potential to provide significant network efficiencies that may help alleviate capacity constraints, enable enhanced service quality, and facilitate expansion of a 4G LTE nationwide network, which would in turn create opportunities for handset innovation and continued development of data-rich applications.”

If not for AT&T, T-Mobile would likely be acquired by somebody else

Meanwhile, the CWA stated that T-Mobile has been on the decline since 2008 and won’t be able to support itself forever – a buyout is coming, regardless of who the buyer is. CWA called the other potential buyer, Sprint, “disastrous,” because Sprint contracts out its network work instead of using the union, and that would cost a lot of jobs rather than add some, as AT&T is more likely to do.

Clearly there are two sides to the story. Kerns raises some very good points, although the size and breadth of AT&T’s network after it swallows T-Mobile doesn’t really speak to its network quality, which has been a concern in the past and may continue to be if T-Mobile customers become AT&T customers and get access to even more iPhones. But a major gain of the merger is in network size and strength, so it appears AT&T at least has a plan in this department.

One area that that wasn’t addressed in Kerns’ email is that of the decrease in competition in the telecom market, which remains a concern for the industry and customers alike. AT&T and T-Mobile merging undoubtedly will have positives – Kerns’ email demonstrates that pretty well – but that’s not to say there won’t also be negatives. But clearly there are two sides to the merger story, and while the Internet might see it as a narrowing of the field, AT&T is telling us it means to increase the strength of its service. That’s definitely a good thing.