AT&T shocked the wireless industry with a $39 billion bid to acquire T-Mobile from Deutsche Telecom in a cash-and-stock deal. If approved by government regulators, the acquisition would make AT&T the largest U.S. wireless carrier and leave Sprint Nextel looking for answers.

With the T-Mobile acquisition, AT&T is making a commitment to expand its 4G LTE deployment to 95 percent of the U.S. population. That means AT&T will reach an additional 46.5 million Americans, including more rural communities and small towns.

"We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers' current demands, build for the future and help achieve the president's goals for a high-speed, wirelessly connected America," said Randall Stephenson, AT&T chairman and CEO.

Straining AT&T's Network

AT&T said the acquisition will boost its infrastructure investment in the U.S. by more than $8 billion over seven years. With T-Mobile, AT&T will has the spectrum and network efficiencies to deal with impending spectrum exhaustion in key markets in the face of growing mobile broadband traffic.

AT&T's mobile data traffic grew 8,000 percent over the past four years, and by 2015 it's expected to be eight to 10 times what it was in 2010. Put another way, all the mobile traffic volume AT&T carried during 2010 is estimated to be carried in just the first six to seven weeks of 2015.

The deal is supposed to translate to better service for customers, including improved voice quality. AT&T also said it's the best way to ensure competitive prices and services in a market where demand is extremely high and spectrum is in short supply. But will the opposite actually occur? Will T-Mobile's customers put a strain on the AT&T network?

"If anything, the T-Mobile acquisition will help alleviate the strain on AT&T's...

2011-03-22 03:45:14