The Federal Communication Commission’s website played host to a partially redacted letter detailing AT&T’s filing for its plans for acquiring T-Mobile.
The filing was posted accidentally and has since been removed but before that happened, TechCrunch was able to put a story together analyzing the information in the filing. It seems to suggest that AT&T is paying about 10 times for the T-Mobile acquisition what it could to expand its coverage to rural areas of the U.S. – something it claims it needs T-Mobile to be able to do.
According to TechCrunch’s story, the filing letter suggests that Verizon is beating AT&T in the rollout of its LTE network, which will reach 97 percent of the U.S. population much sooner than AT&T could do the same without T-Mobile. Part of the reason for the merger for AT&T is to gain hold of a big expansion of network as well as new revenue streams that would allow the telecom company to offset the cost of expanding its network. AT&T would also be able to expand much more quickly with T-Mobile than without it.
Expanding its network for 4G LTE coverage of rural portions of the country will bring in less revenue to AT&T than it brings down from expanding its network in more urban areas, so bringing in T-Mobile would help offset those costs and allow AT&T to bring coverage to more people who need it without too much of a financial burden.
At least, that’s the official line, but TechCrunch’s report states that the FCC filing states that AT&T could pay about $3.8 billion to expand into rural portions of the country – and yet it is paying $39 billion for T-Mobile. That’s a big difference in cost, especially since AT&T claims it’ll have a lot more trouble expanding into rural areas without T-Mobile than with it. It seems the company is paying an insane amount for T-Mobile when it could much more easily just pay for the cost of adding to its own infrastructure.
It’s hard to say if that’s the case. As TechCrunch points out, this is just one piece of the puzzle and there’s a lot to consider. Opponents of the merger are worried that AT&T and T-Mobile combining will further narrow the field of mobile providers, driving up prices and leaving customers with fewer options. Some are even trying to sue to stop the merger. Last week, a report suggested AT&T was willing to unload about $8 billion in network assets to make itself smaller in order to get approval for the merger.
But part of the worrisome things that seem to come out of the redacted filing is the suggestion that Sprint was making a play for T-Mobile before AT&T, and that Ma Bell’s $39 billion offer was really to keep another competitor from acquiring the company, instead of an important expansion of network. AT&T has mentioned in its justifications for the sale that if it didn’t merge with T-Mobile, someone else would have: sounds like Sprint may have been that “someone else.”
There’s a lot of information in the redacted filing that may shed a little more light on the AT&T/T-Mobile merger, but obviously we don’t know everything about what’s going on with it. It’ll be up to the FCC to figure out whether the AT&T merger is best for the American people; hopefully it’ll make the right choice when it comes to decide whether AT&T and T-Mobile should become one – or not.