Several months ago, I blogged about the difficulty AT&T was encountering in the “4G” battles that were engaging. You had 3 different takes: Sprint going with WiMAX, Verizon going with LTE, and T-Mobile going with HSPA+. AT&T seemed to be in trouble trying to figure out what to do, though long term AT&T appeared to be in good shape. My speculation was that AT&T was going to do a hybrid of HSPA+ and LTE to try and split the difference.
AT&T was initially struggling, even though it rebranded its HSPA+ as 4G. It only had 10 cities that really had 4G capability, well behind its competitors. And Apple finally decided to come to agreement with Verizon on the iPhone. It looked like AT&T was going to lose ground.
Then came the bolt of lightning AT&T needed to get back in the game. On Sunday, AT&T agreed to buy T-Mobile for $39 billion. In one strike, AT&T strengthened its hand, while potentially putting a nail in Sprint’s coffin. The question is whether it will survive FCC regulations.
Here’s what it means in the short run:
(1) AT&T can take advantage of T-Mobile’s HSPA+ rollouts: AT&T only had 10 cities that could be considered “4G” with HSPA+. By buying T-Mobile, their HSPA+ network vastly expands. Not only that, but T-Mobile had put in new infrastructure that means future upgrades will require only software upgrades. AT&T now gets the luxury of performing software upgrades for newer technology.
(2) AT&T gains desperately needed spectrum: AT&T was approaching a spectrum crunch and needed some way to add spectrum. They add T-Mobile’s upper frequency spectrum which will provide some relief in the short run, and now put Verizon on the defensive for adding spectrum.
(3) The rest of world will use AT&T in the US. AT&T and T-Mobile both used the world standards of 3GPP (which include GSM, UMTS, and HSPA. With their merger, there will only be one national 3GPP network in the US (Verizon, Sprint, and MetroPCS use the 3GPP2 standards, which include CDMA and EV-DO). That could be the biggest reason why the FCC might kill the deal.
(4) Sprint is in DEEP trouble. Sprint is now running a distant 3rd in a two-horse race between two factions of the old Ma Bell network. Worse, Verizon and AT&T have committed to LTE, while Sprint is still using WiMAX for “4G” for now. Sprint will likely switch to LTE, but because they took so long to roll out WiMAX, they may be a damaged commodity. They could be a target for buyout by Verizon.
(5) Sprint isn’t the only one who could be taken over by Verizon . MetroPCS and US Cellular could be targets for take over by Verizon. On the surface, MetroPCS makes more sense. The technologies are similar. Or Sprint might make a bid for MetroPCS.
In the end, if this merger survives, AT&T will hold a huge advantage in the 4G battles that lay ahead. And it will turn AT&T’s fortune around. But, will we as customers be better for it? That remains to be seen…
No comments:
Post a Comment