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3 On Your Side: AT&T Buys T-Mobile, What It Means For Customers

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PHILADELPHIA (CBS) - It’s a deal worth $39 billion dollars and will create the largest cell phone company in the United States.

AT&T has announced it’s buying competitor T-Mobile. AT&T is currently the country’s second largest wireless carrier, T-Mobile is the fourth largest. When merged together they jump over Verizon to become number one with 129 million subscribers. While the deal isn’t set to close until a year from now, it will likely face tough scrutiny by federal regulators.

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Here’s what a completed deal could mean for customers:

– After the deal is completed, T-Mobile phones with”3G” wireless broadband won’t get 3G service any more, and will need to be replaced. AT&T will be offering new phones with access to AT&T’s 3G network to these customers, but it’s not clear what the deals will be. It could take a year for AT&T to turn off T-Mobile 3G, so there will be time to adjust. AT&T will use T-Mobile’s 3G frequencies for 4G instead, for faster data speeds.

– More phone choices for T-Mobile subscribers. T-Mobile, as a much smaller carrier than AT&T, doesn’t get as many exclusives on top-line phones, and it doesn’t have the iPhone. This won’t be a big benefit to T-Mobile subscribers who don’t have contracts. If they want the iPhone today, they can sign up with AT&T or Verizon Wireless. But subscribers under contract would find it easier to upgrade to an iPhone.

– There will be fewer pricing plans to choose from. T-Mobile and AT&T have different offerings, some of which might disappear from the market.

– There will be no more unlimited data plans. AT&T has stopped offering unlimited data plans in favor of plans with monthly data usage caps and overage fees. T-Mobile USA still offers “unlimited” data for smartphones for $30 per month, but slows downloads after five gigabytes of traffic in a month. If the deal closes, current “unlimited” subscribers would likely be grandfathered in, but AT&T would probably stop offering the plan to new subscribers.

– There will be better network coverage. Combining the two networks will improve performance is some areas, because there will be more towers available. However, today’s AT&T phones can’t use T-Mobile’s 3G wireless data network, and vice versa, because they run on different frequencies.

Consumer groups aren’t convinced the merger is a good move for customers. Gigi Sohn is President of Public Knowledge. She says, “T-Mobile has competed on price.
That’s what they’re all about so when you take them out of the equation it gives companies like AT&T and companies like Verizon to raise their prices.”

Reported by Jim Donovan, CBS 3