By ANNA MARIE BORIA
A cell phone company once known as the “little guy” amongst bigger nation-wide carriers less than half a decade ago, has climbed to the top of the phone industry after announcing a multi-billion dollar deal agreeing to buy out one of its nation-wide competitors.
AT&T is represented in every corner of the cell phone market already. It is represented through the iPhone, cable service and texted votes, like on reality competition shows American Idol and Dancing with the Stars. With this multi-billion dollar deal buying out T-Mobile, AT&T is eating up the competition by reaching nearly half of the nation’s cell phone subscribers.
In the past four years alone, AT&T’s mobile data traffic grew 8,000 percent due to the merge with Cingular in 2007. With this merger, by 2015, AT&T’s mobile traffic is expected to be eight to 10 times what it was in 2010.
The transaction between AT&T and T-Mobile will bring in an additional 33.7 million to AT&T’s already 95.3 million customers. When the merge is finalized, AT&T will beat out the current largest carrier, Verizon Wireless, by more than 28 million customers.
Changes will not be seen in either carrier until the deal between AT&T and T-mobile becomes finalized which can take up to a year. When the merge occurs, changes will cause problems as well as benefits for subscribers coming from T-Mobile.
The positive aspects of this merger includes the sharing of towers, which means a better signal nationwide for the soon-to-be combined network. The two carriers use the same kind of global system for mobile technology to run their phones so this merge will allow current T-Mobile customers to use AT&T’s phones.
This merger is also expected to be a boom for Wall Street with more than half a dozen firms collecting hundreds of millions of dollars in consumer fees.
However, although T-mobile is known for its cheap cell phone plans, the new company will likely require pricier plans due to AT&T’s goal to get customers to switch to smart phones. AT&T promises to do its best to keep T-Mobile’s popular no-contract option.
“I feel T-Mobile should stay the the way it is because I do not want to pay a lot more than I already am for cell phone service. I also feel AT&T is going to have a monopoly when this finalizes,” sophomore Jessica Lee said.
AT&T will likely sell off parts of its business or T-Mobile’s business if the Federal Communications Commission feels the newly gained customers will harm competition.
To mollify the FCC, AT&T will spend an addition $8 billion to expand wireless broadband into rural areas blanketing additional area 4.5 times the size of Texas with its new Long Term Evolution technology. LTE is a 4G wireless broadband technology developed by the Third Generation Partnership Project that will take several years to work.
The merge will bring significant savings for AT&T. The two carriers now each spend roughly $2.7 billion in advertising, so with a combined network, the money spent on advertising should be cut in half. AT&T will be closing T-Mobile stores that overlap in the areas where AT&T stores currently stand.
A small carrier just half a decade ago, AT&T is now rocketing to the biggest cell phone carrier in the nation. And after the deal with T-mobile, AT&T will be the unquestionable leader in nation- wide cell phone service.