There was a lot of media hype recently when AT&T dropped the bombshell announcement that it was purchasing T-Mobile creating the biggest wireless carrier in the USA. This is bad, very bad. Let us explain exactly why the sale of T-Mobile to AT&T should not be allowed. The merger proposed between AT&T and T-Mobile is bad for consumers and also harmful to the wireless industry and will have the following implications if approved:
• The deal would create a precedent for a future merger between Verizon Wireless and Sprint Nextel. The AT&T T-Mobile deal will hurt Sprint because they simply won't be able to compete against their two huge rivals Verizon and AT&T. This will be a huge step backwards to the early years of wireless to the time when there were only two carriers who built out their networks very slowly.
• AT&T is going to combine their service into one company that utilizes both sets of radio frequencies at a single cell site. This will slash revenues of the major players in the tower management industry, like American Tower, Crown Castle, SBA, GTP by about 25%, and will affect the jobs of many people. This deal will also significantly hurt cell tower landlords who will lose a significant amount of rental if the T-Mobile network is taken over, when the income from a cell tower lease is eliminated or lease is terminated.
• T-Mobile is known for being an innovator in the wireless industry. Competition of carriers building out competing PCS licenses was good for the consumer. The carriers had to be competitive and build out their networks rapidly and the average American consumer was able to afford a cell phone as a result. This merger will achieve the opposite result. The price of wireless services will go up and the quality of the service will go down. This is Wireless Economics 101.
• This deal is going to severely hurt those investors who purchase cell tower leases, specifically T-Mobile revenue streams.
• I can't imagine that are aren't any other telecommunications companies or people like Comcast, Google, Richard Branson, Bill Gates, Steve Jobs or Donald Trump who'd love a chance to invest in the success of T-Mobile so they can compete fairly in the marketplace. The AT&T buyout of T-Mobile is their way of killing off the competition instead of competing with them.
• The health of the wireless infrastructure industry depends on the ability of the major cell tower companies like American Tower to assist the wireless carriers in building out their infrastructure at pace required to keep their network robust. Tower companies absorb many hard costs related with cell site development for the cellular carriers allowing the wireless carriers to reinvest their capital into their networks and not into steel in the air. The loss of a quarter of revenues that will occur as a result of T-Mobiles sale to AT&T will be felt nationwide, with the decreased value of their cell tower lease portfolio, will drive some companies out of business and will minimize the ability of the firms left standing to build out the wireless infrastructure at their current pace. And this acquisition will also hurt the smaller wireless firms like Cricket and Metro PCS without a doubt.
Back in the late 1980's AT&T had only one other competitor. Do not be fooled, if this purchase of T-Mobile by AT&T is allowed by the FCC, AT&T will have successfully eliminated the competition, and will force Verizon and Sprint to form an unholy alliance, and they will be back to the stone ages of the wireless industry with only one competitor. How is this good for anybody? The AT&T T-Mobile merger will result in poor service, higher consumer prices and will cause thousands in the wireless industry in both network development and retail, along with thousands in the cell tower industry out of a job. Please contact the FCC and tell them this deal is bad news.
Steve has over ten years of wireless site acquisition, cell site lease negotiation and wireless project management experience. He is a Partner at Tower Genius LLC, an Idaho-based cell site lease consulting and rooftop cellular communications site management firm. Steve's firm also purchases cell tower lease revenue streams and makes lease buyout offers in the United States. Find Tower Genius on the web at http://www.Cell-Tower-Leases.com or you can reach Steve at 1-888-313-9750.
