2+4=1
Yesterday, my last tweet of the day read this: “2+4=1 #AT&T buys #TMobile for $39billion. Twice size of Sprint 1/3 larger than Verizon. Cheap way to improve coverge. SideWinner: #Apple nice”.
So, what this means? It means that AT&T (no. 2 carrier in USA) has agreed to buy T-Mobile (no. 4 carrier in USA) from Deutsche Telekom. This deal would create the largest carrier in USA and promised to reshape the industry, bringing together AT&T’s 95.5 million wireless subscribers with T-Mobile’s 33.7 million customers; AT&T will become roughly one-third bigger than Verizon (currently no. 1 in USA) and twice the size of small Sprint.
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| Source: NY Times |
The name of the game is “economy of scales” by being number one. Since both AT&T and T-Mobile operate on the same technology (GSM) in terms of operation it will be a seamless transition for the customers. Plus it is a “cheap” way to improve the coverage of AT&T (a weakness it has caused some trouble in customer service). The deal would also provide significant cost savings, roughly $3 billion a year for the new company.
Expect the deal to by heavily scrutinized and to come with some detractors. Especially since the deal would leave just three major carriers in USA: AT&T, Verizon and Sprint Nextel. And that it might hurt T-Mobile customers with more expensive rates from AT&T.
The side-winner if the deal is finished is Apple. Even though it might take a while to come up in the product portfolio, T-Mobile customers would have the option to buy an iPhone. And tapping into T-Mobile 33.7 million customers is something Apple is very keen to do since it’s losing the battle of smartphone platforms versus the fast growing Android from Google.
Attention App developers and Entrepreneurs (like Jacobo Molins & Guerson Meyer)! Prepare yourselves for an epic battle for platform dominion and a larger customer base. Opportunities will abound.
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