T-Mobile Dealers Start to Hang Up

Regulators are still busy evaluating the plan to combine AT&T and T-Mobile, but consolidation in the U.S. mobile phone market has already begun. With the outlook for retail stores uncertain, some T-Mobile dealers are selling out or slicing back expansion plans, creating new challenges for T-Mobile as it tries to hang on to subscribers and dealing another blow to landlords already coping with a string of retail bankruptcies.

So far, AT&T and T-Mobile haven't said how they would cut back their combined 9,200 stores. But AT&T executives have said that cost savings from rationalizing retail chains, advertising and back-office systems are a big part of the deal's rationale. AT&T also says it looks forward to working with T-Mobile's independent dealers "in a manner that is mutually beneficial." Wall Street analysts expect store consolidation, especially where AT&T and T-Mobile stores are close to each other. An analysis for The Wall Street Journal by real-estate research firm CoStar Group Inc., which tracks millions of commercial properties across the country, found that 41% of AT&T's stores have at least one T-Mobile store no more than a mile away. The overlap is greatest in the West. In Denver, Salt Lake City, Phoenix, Las Vegas and Los Angeles, the average distance from an AT&T wireless store to the nearest T-Mobile is around one mile, according to CoStar.