Signal Failed: Winners And Losers From The Death Of AT&T’s T-Mobile Deal

AT&T had little chance but to call off its $39 billion acquisition of T-Mobile, but where does that leave all the involved parties come 2012?

1. AT&T: Ma Bell remains the second-largest wireless carrier in the U.S., and is nipping at rival Verizon’s heels thanks to a strong lineup of Android phones and its iPhone legacy. It had 100.7 million subscribers at the end of the third quarter to Verizon’s 107.7 million subscribers, which accounts for an awful lot of the 313 million people who live in the US. But there is a longer-term problem for AT&T when it comes to growth, which is exactly why it coveted T-Mobile. Yet AT&T’s own spectrum situation is not nearly as dire as it would have regulators believe; instead, it was driven more by the need to grow its subscriber base in light of its infamous reputation in the iPhone community for network performance and customer service. Now it will actually have to compete on the merits of its products and services. That might be a problem.
2. T-Mobile: What a waste of a year. T-Mobile is definitely vulnerable after throwing all of its eggs in AT&T’s basket, shedding subscribers by the quarter and having endured a year in which AT&T basically forbid it from appearing on the public stage in order to maintain appearances that this was one big happy merger of “equals.” T-Mobile does not have an easy route to LTE. It might have to cut deals with third-party LTE providers like Clearwire or LightSquared, but those come with their own distinct perils. Perhaps a more likely outcome is that T-Mobile joins forces with a smaller player, like U.S. Cellular, MetroPCS, Leap Wireless, or C Spire in order to pool their assets toward network expansion.