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Wowzers! AT&T and Deutsche Telekom have entered into a definitive agreement for the sale of T-Mobile USA for $39 billion in cash and stocks. The combined customer base of this upcoming behemoth will be 130 million humans, though the agreed deal will have to pass the usual regulatory and closing hurdles before becoming complete. The two companies estimate it'll take them 12 months to get through all the bureaucracy -- if they get through, the proposed network merger will create a de facto GSM monopoly within the United States -- but we don't have to wait that long to start discussing life with only three major US carriers. AT&T envisions it as a rosy garden of "straightforward synergies" thanks to a set of "complementary network technologies, spectrum positions and operations."

One of the other big benefits AT&T is claiming here is a significantly expanded LTE footprint -- 95 percent of Americans, or 294 million pops -- which works out to 46.5 million more than AT&T was claiming had it gone LTE alone. Of course, T-Mobile has never put forth a clear strategy for migrating to LTE, suggesting that AT&T plans on using the company's AWS spectrum to complement its own 700MHz licenses as it moves to 4G. You might be groaning at the thought of yet another LTE band, but it's not as bad as you might think: MetroPCS already has a live LTE network functioning on AWS, so there's precedent for it.
This is huge, for both the American and Canadian wireless industry.
 

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For those who don't know, T-Mobile USA is the only other notable provider in the world to use the 1700 (AWS) band of wireless spectrum for their HSPA network, the same spectrum Wind, Mobilicity, and Videotron use. Shaw and Eastlink, whenever they launch, will also use that spectrum, and Rogers, Bell, and Telus own but don't use licenses for it.

AT&T, at the moment, uses the same two bands (850 and 1900) as Bell, Telus, and Rogers for their HSPA network. AT&T and T-Mobile both also operate a 2G GSM network on 850/1900, just like Rogers.

There's already a lot of speculation as to what will happen with the two networks following the merger. The 2G GSM networks will be integrated together, and AT&T will remove or reallocate any unnecessary towers. As for the HSPA networks, it remains unclear. One possibility is that AT&T offers free phones and sweetheart plans as an incentive to migrate T-Mobile users off of the T-Mobile HSPA network and the mothballs it, allowing them to reallocate that spectrum.

However there are flaws in that plan. For one, AT&T has a very saturated network as it is, adding 30 million more people could be more than they could take. Another problem is that they would be forced to destroy millions of dollars in existing phone stock and give away millions more in free phones.

The far more likely outcome is that they keep both networks and integrate them as best they can. Unfortunately very, very few phones work on both the 850 and 1900 bands and the 1700 band. However, with about 130 million subscribers, this new AT&T will become one of the world's largest carriers, and will be motivated to pressure phone manufacturers for phones with pentaband HSPA chipsets that could work on both networks.

This would be hugely beneficial for Canadians. With pentaband phones, Canadian subscribers could easily migrate their handsets to and from the Big 3 and the various new entrants. The one thing we Canadians do not want to see is the dismantling of T-Mobile's current HSPA network. Without a major 1700 band carrier, it will be very difficult for the new entrants to find and order new handsets.
 

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This is huge news - perhaps not so good for competition south of the border..
But if the network remains online with all frequencies we should be seeing far more pentaband phones, as Colin said. A huge win for competition for us. No more being tied down to any one carrier because your phone doesn't support the new entrants, or vice-versa.
 

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This is big...so big that I'm shocked there was no forewarning. I know D-Telecom was not enjoying the same market leading position in NA as in Europe, but I can't believe they're just walking away. VZW has instantly lost bragging rights to being the largest US mobile company.

This is either very good or very bad for AWS...I can't wait to see how it plays out...
 

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There were rumours last week that they were looking to sell T-Mobile, but the likely buyer seemed to be Sprint. However, had that happened Sprint would have had two completely incompatible networks (actually 4, Sprint has CDMA and iDEN and T-Mobile has EDGE and HSPA+) and completely different sets of spectrum. From a technological standpoint AT&T makes more sense as a buyer, and likely means T-Mobile is worth more to them than to Sprint.

From the T-Mobile website:
If the acquisition closes, will I still be able to use my T-Mobile USA phone?
Yes. Your T-Mobile USA device will operate the same in the future as it does today.
So it definitely looks like they intend to keep the T-Mobile HSPA network, which would be great for Canadians.
 

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The key word is IF. I would say this deal has a 50/50 chance. First of all the FCC is on record stating there isn't enough competition in the US and I'm sure Sprint will raise hell and remind the FCC of their position.

This is a big deal, perhaps too big.
 

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Market Response

Wow, Sprint is getting spanked on the market...down 15% on the news.

http://www.google.com/finance?q=NYSE%3AS

1700 is alive and well which is good for us AWS users.
@james99, I think the quoted story is actually double-edged...looks like the HSPA generation for AWS will be deprecated in favour of the next generation LTE AWS...that could mean that the current footprint will not grow at all until LTE is live, no?
 

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I don't see why AT&T would halt AWS in its current form. Just flip the switch down the line and switch to LTE. All LTE is is using the entire spectrum for data, where voice is within the data connection, instead of two separate connections used now.

AT&T would probably expand the AWS footprint as much as possible if they want to be an LTE leader. Then down the line 'reprogram' the antennae to their new network.

And they've released an official statement:
http://newsroom.t-mobile.com/articles/more-information-att-acquires-tmobile
 
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