Dallas,Texas-based AT&T is purchasing T-Mobile from Bonn,Germany's Deutsche Telekom AG for 39 billion dollars.AT&T's competitors declined to comment on the news.Sprint had reportedly been talking with DT for some time about possibly acquiring T-Mobile itself,but agreement eluded them on valuation,among other issues.
Analyst Kevin Smithen of Macquarie Group Limited said that Sprint was left standing at the altar.We believe that Sprint is the odd man out.
The deal makes AT&T the largest U.S. wireless carrier.It needs more radio spectrum to improve smart phone data transmission,spectrum which will help it set up its high speed network,Mr.Smithen noted.AT&T is also acquiring spectrum from Qualcomm.These moves should help in the short term.They will be in the market for more,however.
With this deal,AT&T will get customers and infrastructure as well.Overall smart phone penetration rates are 21-22%.As more phones hit the market,there will be a huge demand for wireless data over the next 12 months,Mr.Smithen believes.
The need for wireless data will continue to grow.This creates a huge opportunity for players who do control spectrum going forward.The deal will help AT&T roll out the futuristic LT service to 95% of the nation,the Macquarie analyst predicted.
AT&T(T),Deutsche Telekom AG(DT)
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