I have a confession to make: I am fascinated with wireless networks. A lot of it has to do with my job. But the evolution of wireless networks has been an amazing advance to witness, starting with the first analog cell phone networks in the 1980s, moving on to digital cellular networks in the 1990s, the addition of WiFi networks around the turn of the century, and now the convergence of cellular and broadband wireless data in mobile internet devices. Initially, wireless networks (both cellular and wireless data) were considered a luxury by only the rich and businessman. However, beginning in the late 1990s, cell phones became affordable, and as more people saw the benefit of laptop computers, WiFi networks became a necessity itself. Over the last 4 years, with the advent of the iPhone, the cell phone has morphed into a smartphone, and with the iPad, the computer has become smaller and even more portable.
Long ago, the number of wireless phones blew past the number of landline phones, and just recently, the number of wireless broadband data devices surpassed fixed broadband devices. This is good and bad for users of smartphones and tablets. It’s good because it is clear wireless broadband and phone is not just the future, it’s now. The bad is that with wireless, you need one or a combination of three things to prevent rapidly increasing demand from causing a smartphone meltdown: increased data speeds, more frequency spectrum, and more cell towers/backhaul towers. In some ways, AT&T’s proposed merger with T-Mobile addresses two of those needs so AT&T can implement the third need and build its LTE network. T-Mobile has built up their capacity in urban areas (both cell and backhaul towers). T-Mobile also has the AWS Spectrum which maybe the key reason AT&T has shown interest in buying T-Mobile.
But there are good and bad reasons for the merger to proceed, and it is what Congress is grappling with as they seek to approve the merger:
Good reasons for the merger: T-Mobile’s parent company is leaving the US Market. Deutsche Telekom, the German telecom giant who owns T-Mobile, has wanted to leave the US Market to focus on other investments around the globe. So, the #4 provider, needed a company to buy it. Also, the merger enables AT&T to develop their LTE network in a much quicker timetable and challenge Verizon for the fastest LTE speeds. And, as I stated earlier, AT&T needs frequency spectrum. In cities, such as New York and San Francisco, the capacity has been exceeded by users. Without additional spectrum, AT&T would be forced to build tens of thousands of cell towers to meet the capacity, which would set AT&T back financially in a down economy.
Bad reasons for the merger: An AT&T-T Mobile merger means there would be only one telecom company in the US that uses the World’s largest cellular standard, 3GPP. 3GPP encompasses GSM, WCDMA, HSPA/HSPA+, and LTE. And in the US, AT&T and T-Mobile are the only companies that use this technology. Sprint, Verizon, MetroPCS, and other regional networks use the 3GPP2 standard, which include CDMA, EV-DO, and LTE/WiMAX. So, the merger of AT&T and T-Mobile means that most worldwide customers would be forced to AT&T when roaming in the US, meaning AT&T would have a sort of monopoly. AT&T and Verizon would hold 80% of all US cellular customers, which might mean Sprint and other companies would be at a severe disadvantage.
Why the merger must go through: No other cellular company could buy T-Mobile and survive the eventually merging of technologies other than AT&T. There was talk of Sprint and T-Mobile merging, but the integration of all the technologies would be a disaster and would effectively destroy Sprint. And considering Deutsche Telekom is leaving the US, T-Mobile needed a buyer who could make the transition smoothly. In the end, if the merger is not approved, you still need a buyer for T-Mobile or else T-Mobile will fail and AT&T will struggle along and still need spectrum.
In the end, the merger of AT&T and T-Mobile has advantages and disadvantages, but ultimately, I believe it will have to go through. The question is will Congress and the FCC see it the same way.
No comments:
Post a Comment