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AT&T, T-Mobile deal: What it means for customers

Executives attend a news conference in New York on Monday about AT&T’s plan to buy T-Mobile USA for $39 billion.

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Executives attend a news conference in New York on Monday about AT&T’s plan to buy T-Mobile USA for $39 billion.

With AT&T's announcement Sunday that it plans to buy T-Mobile USA for $39 billion, customers will have to get ready for some changes, although the deal isn't set to close for about a year and likely will face tough regulatory scrutiny. Here's what a completed deal could mean for customers:

• Some time after the deal is completed, T-Mobile phones with "3G" wireless broadband won't get 3G service anymore, and will need to be replaced. AT&T will be offering new phones with access to AT&T's 3G network to these customers, but it's not clear what the deals will be. It could take a year for AT&T to turn off T-Mobile 3G, so there will be time to adjust. AT&T will use T-Mobile's 3G frequencies for 4G instead, for faster data speeds.

• T-Mobile subscribers will have more phone choices. T-Mobile, as a much smaller carrier than AT&T, doesn't get as many exclusives on top-line phones, and it doesn't have the iPhone. This won't be a big benefit to T-Mobile subscribers who don't have contracts — if they want the iPhone today, they can sign up with AT&T or Verizon Wireless. But subscribers under contract would find it easier to upgrade to an iPhone.

Wider rural broadband coverage. AT&T is pledging to increase spending on the construction of a new ultrafast broadband network by $8 billion, to cover rural areas.

Fewer pricing plans. T-Mobile and AT&T have different offerings, some of which might disappear from the market.

Better network coverage. Combining the networks will improve performance in some areas, because there will be more towers. But today's AT&T phones can't use T-Mobile's 3G wireless data network, and vice versa, because they run on different frequencies.

• No more unlimited data plans. AT&T stopped offering unlimited data plans in favor of plans with monthly data usage caps and overage fees. T-Mobile offers "unlimited" data for smart phones for $30 a month. If the deal closes, "unlimited" subscribers could be grandfathered in, but AT&T would likely not offer the plan to new subscribers.

The big question is whether the merger would let AT&T, Verizon and Sprint raise prices on wireless service once competition from T-Mobile disappears. AT&T points out that prices have fallen through a decade of mergers in the industry, but public-interest groups are raising concerns.

AT&T, T-Mobile deal: What it means for customers 03/21/11 [Last modified: Monday, March 21, 2011 8:41pm]
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