Losers abound in AT&T deal with T-Mobile

T-Mobile users are up in arms about the proposed acquisition. With video updates.

By Kim Peterson Mar 21, 2011 3:02PM
AT&T (T) and T-Mobile. Was there ever a deal so universally reviled? People across the board are holding their noses at this proposed $39 billion marriage.

"It's hard to find winners, apart from AT&T and T-Mobile shareholders," Om Malik writes on the GigaOM technology blog. The biggest losers in the deal, he says, would be consumers. That's because T-Mobile has offered cheaper voice and data plans and because the market would have only three main national players: AT&T, Verizon (VZ) and Sprint (S).

Phone handset makers would also lose, Malik writes, because there would be one less carrier that would buy GSM-based phones from shops like HTC and Motorola (MSI).

T-Mobile customers are up in arms. Having your carrier acquired by the worst cellphone company in the U.S. wouldn't make anyone happy.

Post continues after this video of the head honchos at both companies defending the deal:
"I really dislike AT&T," one T-Mobile user wrote in a customer forum. "We can expect constant rate increases as they squeeze as much cash out of us as they think they can get away with."

Many T-Mobile customers expect price hikes. "I find AT&T always goes on these merger sprees which they can't afford, and then they turn around and raise fees for everyone under-contract," another user wrote.

But technology expert Glenn Fleishman sees a silver lining. Yes, prices would likely go up, he wrote, but quality would also. "AT&T and T-Mobile customers will see an immediate and huge improvement in call quality and coverage area once the merger is approved," he wrote. "Both companies keep users as much as possible on home networks in areas in which both firms provide service. "

Sprint, of course, would be a huge loser because it would drop to last place among the national wireless carriers, The Wall Street Journal reports. Sprint had been talking with T-Mobile about a deal, but AT&T rushed in and essentially grabbed T-Mobile out of Sprint's hands. Sprint shareholders were showing their displeasure Monday, sending the stock down 15% to $4.29 in midday trading.

AT&T shares, meanwhile, were up more than 1% to $28.31. T-Mobile is a unit of Deutsche Telekom (DTEGF).

Sprint ended last year with about 50 million subscribers. With T-Mobile under its belt, AT&T would have 130 million subscribers.

There's one final group of potential losers: iPhone users. AT&T would have a tougher time integrating T-Mobile, because its network is already overloaded by iPhone users, one analyst told Bloomberg.

"That network is already struggling and has been ever since they landed the iPhone, so that network isn't ready to dump a bunch of T-Mobile customers onto it," said the analyst, Craig Moffett of Sanford Bernstein.

More from MSN Top Stocks:

28Comments
Mar 21, 2011 5:45PM
Mar 21, 2011 6:55PM
avatar

Gotta love the irony.  Almost thirty years after the government broke up the original AT&T for its stranglehold on telecommunications in the US, they're now poised to be back on top bigger than they ever were!  Funny how that happens...  Guess you need several decades to get enough politicians in your pocket to overcome any antitrust judgements.  It would be so nice to believe that the FCC will prevent this from happening...but once again, consumers will be trampled in the rush to bigger piles of money for a corporation.  There's no way this is a good deal for phone users: AT&T's network is already overloaded so adding T-Mobile customers will only make it worse.  More importantly, it means one less carrier for people to choose from.  And those unlimited voice and data plans from T-Mobile?  Kiss them goodbye.

Mar 21, 2011 10:45PM
Mar 21, 2011 9:40PM
avatar
I work for T-Mobile, and have been building their network to be the largest 4g network ( even though exact standards for 4g haven't been disclosed) And for all the effort of my team and I - We will be let go when this merger finalizes.............. Yeah for me.
Mar 22, 2011 12:50AM
avatar
Hello lan line and prepaid for emergencies.  AT & T screwed me years ago guaranteeing me a better price than T-Mobile.... Well I  got the bill.....they lied.  I went back to T-Mobile. T-Mobile should have turned around and bought AT & T out. Please somebody out there within the next 12 months establish a new carrier that equals T-Mobile. I am glad that my plan expires by the time this comes into effect.
Mar 21, 2011 11:47PM
avatar
Here we go again, we all know that the customers will get the shaft/ Lets go ahead and screw all of the dumb public, just like it has been done before. But that is OK, because lots of the fat cats will make another mil. or so.
Mar 22, 2011 2:56PM
avatar

I think this must be all my fault:  I was with Cingular and then AT&T bought them.  So I switched to T-Mobile to avoid AT&T like the plague.  And here they go again.

 

T-Mobile has (had?) the best customer service - just the absolute opposite of what is in store for us with AT&T.  I pay T-Mobile about $45 a month for data and voice - that will go to at least $60 (or more likely $70) with AT&T.

 

I dislike AT&T so much that I bought an unlocked AT&T Blackberry Torch for $500 just so I could stay on T-Mobile.  It was worth $500 to me to not be on AT&T.....and now here I am.

 

I'm cursed.

Mar 22, 2011 2:19AM
avatar
So if my contract is with T-mobile and they no longer exist, is my contract still binding, I wonder? I left AT&T because of my displeasure. Looks like Verizon, Sprint, prepare for a great influx of new customers.
Mar 22, 2011 6:56AM
avatar

Piss on At&t.  Either way you go with this merger, the consumer is the one that loses out.  I have 18 days till my contract is up with At&t and I will opt to go to net 10 and pay for minutes at my leisure and, even better, stay anonymous by paying cash for minutes when I need them.  It's just too bad that most of Americans are just sheep and will blindly pay whatever is asked of them out of shear laziness.

 

My heart goes out to the soon to be unemployed masses after this disaster of a merger goes through.

Mar 21, 2011 5:19PM
avatar
Interesting.  I have read where ATT users would benefit from taking in T-Mobile.  You get the additional towers and the network, so you have additional capacity.
Mar 22, 2011 7:41AM
avatar

Hate AT&T.  Have had nothing but bad experiences with this company, no matter whether it is land line, cell phone, or Yellow Page ads.  The most pompous business I have ever dealt with!  Hopefully this merger will be denied!

Mar 22, 2011 2:10AM
avatar
This sux for T-Mobile customers. These 2 fat cats could care less about average Joe so they spue all this nonsense hoping they can sell it to everyone!! This is a no-win situation for the consumer that is all I know they ar eoverloaded as it is now we won't have any bandwidth either!!
Mar 21, 2011 8:13PM
avatar
Wife loves AT&T  hates T Mobil.  I could care less.   Just need to make a call now and then.  And not have a flipin phone cost as much as my house insurance.!
Mar 22, 2011 12:11AM
avatar
I am a t-mobile user, but if my rates go up, I will shut my phone off and we will become a single phone family. Either that or I will go with Verizon. I was with them before, and I liked them, but T-mobile offers better coverage where I am at. Verizon isn't bad, but when I visit my family in Indiana, the one little white spot in Verizon's coverage happens to be my home town. So, absolutly no coverage while visiting.
Mar 22, 2011 4:01PM
avatar
If AT&T acquires T-Mobile I will switch carriers within 2 weeks after several years with T-Mobile.
Mar 21, 2011 10:56PM
avatar
''Recognition in the falsity of material wealth as the standard of success goes hand in hand with the false beleif that public office and high political position are to be valued only by the standards of the pride of place or personal profit.And there must be an end to a conduct in banking and in business           which to often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder confidence languishes for it thrives on honesty on honor on the sacredness of obligation , on faithful protection, on unselfish performance, without them  it can not live''. Franklin Roosevelt
Mar 22, 2011 10:16PM
avatar
Let me get this straight AT&T can't provide decent service to their already existing customers with iphones, and their solution is to try and buy another company? WTF!!!  How many idiots are there running AT&T? Thank God I left T-mobile and got a tracfone. By the way the tracfone has cost me all of $107 since October 2010. And that included the cost of the phone. I only pay for what I use and have the added bonus of not paying and outrageous state tax every month. Almost 8% in Massachusetts.  I hope what happened to Time-Warner and AOL happens to AT&T and T-Mobile. And with the idiots running AT&T it probably will.
Mar 22, 2011 10:53PM
avatar
For all of you with T-Mobile contracts... good luck!  I was with the original AT&T, before Cingular bought them.  They were actually great, then!  After the merger, Cingular forced everyone to upgrade phones, with no break on phone prices... or else suffer with high rates and virtually no plan options.  I gladly paid the $150 penalty fee to get rid of them!  By the way... AT&T didn't buy out Cingular... they already owned the label when Cingular bought them the first time around!  The name change, (back to AT&T), was just "smoke and mirrors" to improve their bad public image... one they well earned.  This is an evil company with no scruples about lying about their service, coverage and customer satisfaction.  In December, Consumer Reports rated them "The Worst" of all the providers in the nation, (Dec, 2010).! This merger is ALL about AT&T trying to weather that damning CR article, as well as weather the storm of iphone users running as fast as they can to Verizon, (30% some say!).  If either Verizon or Sprint would have landed the iphone first, I honestly think AT&T would have not survived.  How could they, with the way they treat their customers!  Just look at these comments posted on this blog... anger filled comments!  I have been with Sprint since I left Cingular and am exceedingly happy with them.  Poetic justice would be for this deal to be denied by the Feds!  If that happens, AT&T will be scrambling like roaches when the light are turned on!  Go Verizon, Sprint and anyone else who can screw AT&T!
Mar 22, 2011 7:05PM
avatar
I will be switching as soon as possible.  I was with Cingular when AT&T bought them and after that happened - my phone calls got dropped every single time.  Every single call I made or received for the next few months was dropped at least once.  Good bye AT&T! (again)
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
262
262 rated 2
480
480 rated 3
651
651 rated 4
649
649 rated 5
629
629 rated 6
616
616 rated 7
496
496 rated 8
346
346 rated 9
111
111 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION9
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.