Acquisition of T-Mobile by AT&T: a critical switch in the mobile industry

AT&T are the global leader (in revenue) in providing their customers with the access to communication channels such as the Internet and cell phones. Among others, they are one of the US leader companies in providing mobile broadband network, both in the US and in more than 130 foreign countries.

It must be one of the most decisive turning points in the wireless industry from the beginning of the 21th century: AT&T have issued publicly that they were to buy T-Mobile USA for $39 billion in cash and stocks. Trough the acquisition of T-Mobile from parent company Deutsche Telekom, AT&T can expect to take over near 34 million customers, and is bound to supply mobile network to about 43 percent of U.S. cell phones. In short, AT&T will become the US largest network operator. In 2010, the company considered their customers were about 95.5 million. Thanks to the deal, AT&T is likely to expand its Long-Term Evolution (LTE) wireless technology to an additional 46.5 million customers.

With almost 5 billion mobile phone users nowadays, the mobile technologies are growing rapidly worldwide. Thus, mobile internet access, WIFI access, 3G, Bluetooth and Near Field Communication are tools which expansion has been progressively changing the world's face. Therefore, as tourism activities adapt to people’s lifestyles, the level of innovation concerning tourism practices involving more and more mobile technologies has increased. Indeed, the diversity of tourism-related devices, smartphone applications and technology-based services has been widening rapidly. Tourism is then an industry in which mobile technological innovation has become essential. Nonetheless, the acquisition of T-Mobile USA by AT&T is not a good news for customers, including mobile users in tourism activities. Indeed, that deal will give the US company a leader position which means increased power.

However, it is well known that monopolies or reduced competition plays against the interests of consumers regarding prices. Then the position reached by AT&T via T-Mobile acquisition will necessarily modify the power relationship between the customers and the company and may cause the mobile network prices to rise. Therefore, even though the importance of mobile tourism has been growing for the last twenty years, its role is likely to decrease for profitability reasons in many tourism businesses in the next years. To conclude, by acquiring T-Mobile USA from Deutsche Telekom, AT&T will bring about a critical switch in the mobile industry.



Picture retrieved from: http://www.att.com


References:
http://www.digitaltrends.com/mobile/att-t-mobile-merger-7-biggest-changes-for-customers/

http://www.att.com/gen/press-room?pid=19358&cdvn=news&newsarticleid=31703&mapcode=corporatefinancial