On March 20, 2011, AT&T and Deutsche Telekom AG announced that the two companies have entered into a definitive agreement in which second-largest wireless carrier AT&T would acquire number four carrier T-Mobile USA for $39 billion cash and stock. But is it going to be good or bad for American consumers?
Why the Merger is Important for AT&T Mobility
According to AT&T, the acquisition will provide a “fast, efficient and certain solution to impending spectrum exhaust challenges facing AT&T and T-Mobile USA in key markets due to explosive demand for mobile broadband.”
Mobile broadband usage has risen substantially since 2005, ever since the launch of 3G networks and the increased data speeds. The Apple iPhone, which is credited by many consumers for being the main reason why AT&T has been able to maintain its lead in the industry, opened the door for Android phones such as the T-Mobile myTouch 4G and the Motorola Droid. These phones and their wide array of applications caused a surge in wireless data usage. This usage increase has caused spectrum shortages to become a reality for all wireless phone companies, especially giants AT&T, Sprint, Verizon, and T-Mobile.
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