March 20, 2011 8:59 PMAT&T announced it was acquiring T-Mobile for $39 billion. Among the compelling reasons/benefits AT&T cited for the merger (from the AT&T news release):
With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans - including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama's goals to connect "every part of America to the digital age." T-Mobile USA does not have a clear path to delivering LTE.As I noted yesterday, I'm out at COMPTEL PLUS, one of the most important trade shows for providers of fiber capacity of the year. Fiber guys (and gals) like COMPTEL because carriers come ready to write checks.
With this in mind, I have to say that AT&T's statement is not hard to believe. The show floor opened about an hour and a half ago, and a lot of carriers hadn't yet heard about the deal, but--after taking the temperature based on a quick lap around the floor--the reactions were generally optimistic.
Here's why: a lot of fiber backhaul providers do business with AT&T, not so many do business with T-Mobile. Many believe that, if this acquisition turns the CapEx spigots up higher for AT&T, then more capacity will trickle through the supply chain. The great thing about the wireless supply chain is that for LTE, it will have to be even more dense with high capacity bandwidth. Bandwidth that then becomes available for other carrier customers, and large enterprise users. Hopefully, regulators will understand that while spectrum starvation motivated this acquisition, the deal has benefits that can potentially cascade throughout the competitive telecom ecosystem.