“More bars in more places” may be more than just a catchy slogan for AT&T by this time next year, after the company announced Sunday that it’s buying up the only other GSM-based U.S. carrier, T-Mobile USA, for a whopping $39 billion. While many are predicting the death of wireless competition, the real question is: What does this mean for the iPhone?
AT&T slipped out a “Sunday surprise” yesterday by announcing a deal with Germany’s Deutsche Telekom to buy their T-Mobile USA division for a handsome $39 billion. By adding T-Mobile USA’s 35 million customers, the deal will now make AT&T the reigning carrier in this country, far surpassing Verizon’s current 100 million customer base -- and leaving third-place Sprint even further in the dust with 50 million customers.
The purchase will allow AT&T to tap into T-Mobile’s additional wireless spectrum and cell towers, speeding up a process that the carrier claims would have taken five years to build on their own. While the deal isn’t expected to close for 12 months, the deal should be a win-win for existing AT&T customers, including the millions of iPhone customers who have been (im)patiently waiting for network improvements.
AT&T claims their network density will increase by approximately 30 percent in the most heavily populated areas frequently cited as iPhone trouble spots (San Francisco and New York, we’re looking at you), but the benefits will also extend to urban and rural areas where AT&T has fallen well behind rival Verizon Wireless. The deal is also expected to expand 4G LTE service to 95 percent of the U.S. population, which is certainly nothing to sneeze at.
The first question on the minds of many iPhone users is, “Does that mean I can finally get an official T-Mobile iPhone?” The company has already publicly stated that T-Mobile USA will remain an “independent company,” dashing our hopes and dreams with the blunt statement, “We do not offer the iPhone.” (They do, however, offer “cutting edge devices” such as the Samsung Galaxy S 4G and the new Sidekick 4G.)
Of course, as adventurous jailbreak users have already discovered, the AT&T GSM iPhone doesn’t currently gain any significant advantage from using T-Mobile’s network, mostly because the magenta carrier’s 3G network uses the 1700/2100MHz spectrum, while AT&T uses 1900MHz -- which means no 3G on your iPhone, you’ll only get EDGE speeds. But that doesn’t mean that Apple won’t build the missing radio band into the next iPhone, or the one after that -- so don’t rule out a T-Mobile iPhone just yet, especially when the deal isn’t expected to close for a year anyway.
Despite this limitation, AT&T’s deal with T-Mobile may give them one more reason to finally allow the iPhone to be officially unlocked, since they no longer have to fear customers jumping ship to T-Mobile (3G data limitation aside). AT&T has famously pointed the finger at Apple all these years, and Cupertino does seem to be to blame for keeping U.S. iPhones locked down, even as they sell the device fully unlocked in many European countries.
Should AT&T secure the iPhone for their T-Mobile customers after the deal closes, that would put 100 percent of U.S. GSM-based iPhones under their extremely large roof, essentially negating the need for a carrier lock on the device -- we’d be free to travel to other GSM-based countries (which is most everywhere in the world these days) and use a local SIM card to save money.
Unfortunately, that’s also the same reason AT&T may not want to offer an unlocked iPhone, seeing how they currently reap insane rewards from their international roaming packages for both voice and data -- never mind the fact that many refuse to pay those exorbitant prices in the first place, instead opting for hackery such as jailbreaking to free their iPhones.
It’s clear that AT&T’s main interest in T-Mobile USA is to rapidly expand their own 4G LTE plans -- during a call with investors on Monday morning, the carrier confirmed plans to use T-Mobile’s AWS spectrum for that very purpose. Since AT&T doesn’t use the 1700MHz spectrum for their network, they can push existing T-Mobile customers off this frequency and couple it with their own 700MHz spectrum -- blanketing 95 percent of the U.S. population with 4G LTE in the blink of an eye.
That won’t do much for current iPhone users (although it could theoretically bring T-Mobile 3G to an unlocked handset), but it’s a good sign that Apple may introduce a 4G LTE iPhone 6 next year to take advantage of it. Sorry, speed lovers, we don’t see Apple jumping on board LTE this year with the iPhone 5, if history is any indication -- you’ll recall the original iPhone launched in 2007 with EDGE only, even though AT&T had a fairly extensive 3G network at the time. (Never mind that a year later, the network was nowhere near ready for the crush of new iPhone 3Gs being activated on it.)
While many pundits are lamenting that wireless competition in the U.S. is going to take a hit from AT&T’s purchase of T-Mobile USA, the reality is that fourth-place T-Mobile was eventually going to get scooped up by another carrier sooner or later -- recent rumors pointed to Sprint expressing an interest, but it’s likely they can’t compete with the $39 billion AT&T is ponying up. Bringing the two GSM-based carriers under one roof simply makes sense, especially if they can unify their wireless spectrum at the same time that they take advantage of each other’s hardware.
There are certainly hurdles to be crossed with this deal in the next year (regulatory approval from the government being the biggest), but for the iPhone user, the combo of AT&T + T-Mobile USA should finally make good on the promise of “more bars in more places” at last -- as long as we don’t wind up paying higher wireless rates as a result of AT&T’s deep-pocket spending spree.
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