The acquisition of T-Mobile USA by AT&T should present fewer technological challenges than with the mooted merger between Sprint Nextel and T-Mobile USA. T-Mobile operates GSM, HSPA+ and AWS technology, and is considering moving into LTE. Sprint…
The acquisition of T-Mobile USA by AT&T should present fewer technological challenges than with the mooted merger between Sprint Nextel and T-Mobile USA.
T-Mobile operates GSM, HSPA+ and AWS technology, and is considering moving into LTE.
Sprint currently operates iDEN and CDMA, and (through its majority stake in the WiMAX network provider, Clearwire) has effectively backed WiMAX as a 4G technology in the short term.
Some commentators saw the potential merger between Sprint and T-Mobile as difficult in terms of technology.
US operators have increasingly come to be defined by whether they are backing LTE or WiMAX, although in other parts of the world the two technologies have been seen as more complementary than in conflict.
In any case, AT&T does offer a much closer technology fit to T-Mobile. AT&T currently operates GSM/UTMS technology, as well as LTE.
AT&T is targeting ambitious levels of synergies from the deal, up to US$3bn a year from three years after the close of the deal. This suggests that major savings can be found in bringing the two networks, with their accompanying technologies, together.
The other key consideration with this deal is spectrum.
The skyrocketing levels of mobile broadband traffic mean that operators are looking for more spectrum to service the needs of their customers.
In this context, T-Mobile USA was an attractive target for a spectrum-hungry AT&T.
T-Mobile has spectrum in the 1900MHz band for its GSM technology, as well as spectrum in the 1700/2100MHz bands for its AWS technology.
A T-Mobile spokesperson told TelecomFinance before this deal was announced that the company “is growing into our AWS spectrum in the US and we have the headroom for additional growth”.
In its statement yesterday, AT&T said that it expected it mobile data traffic in 2015 to be 8-10 times higher than the equivalent figure for 2010.
It said: “Because AT&T has led the US in smartphones, tablets and e-readers – and as a result, mobile broadband – it requires additional spectrum before new spectrum will become available.”
