AT&T merger could mean better coverage — but higher prices

Marketplace Staff Mar 21, 2011
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AT&T merger could mean better coverage — but higher prices

Marketplace Staff Mar 21, 2011
HTML EMBED:
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STEVE CHIOTAKIS: AT&T says it’s buying T-Mobile USA in a near $40 billion deal. T-Mobile is the nation’s fourth biggest wireless carrier. And combined, the two would become the nation’s biggest.

Let’s talk to Carl Howe, a telecom analyst with the Yankee Group on how this is all going to play out. Good morning.

CARL HOWE: Good morning.

CHIOTAKIS: Expalin how these two companies would become one.

HOWE: The merger is actually one where AT&T will pay about $25 billion in cash, and then the rest is in stock. The two companies would then go on to operate as one, and that would create the largest telecomm carrier, or the largest wireless carrier in the United States.

CHIOTAKIS: So more importantly, though, Carl, I want to know if this is going to mean my AT&T phone bill will change. Will it be cheaper for me? Are prices going up? What’s this going to mean?

HOWE: Well, I think there’s good news and there’s bad news. The good news is that you’ll have more coverage simply because AT&T gets a whole bunch of new spectrum, and they get a lot of wireless towers. The bad news is that AT&T now becomes the defacto national carrier for GSM handsets so that the iPhone and a variety of other handsets. So in all likelihood, you’ll see prices go up.

CHIOTAKIS: What about the networks? You said cell phone towers will be more abundant. Will I get service in downtown LA, or Manhattan or Chicago?

HOWE: You should get much better service actually because T-Mobile has been covering those same cities for quite a while. If AT&T pulls all of their cell towers into their network, you’re going to get better coverage.

CHIOTAKIS: All right, Carl Howe, telecomm analyst with the Yankee Group. Carl thanks

HOWE: Thank you.

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