AT&T buys T-Mobile: What Does It Mean For Consumers?

March 20, 2011 10:01 PM EDT

AT&T just announced that it will buy T-Mobile USA from German company Deutsche Telekom for $39 billion. By doing so, AT&T will become the largest US wireless network.

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Moreover, there will just be two other US networks left: Verizon, which would be slightly smaller than AT&T, and Sprint, a distant third.

T-Mobile immediately published a Q&A that assured customers that in the short-term, there will be no changes or inconveniences; billing will not switch to AT&T, T-Mobile will honor existing contracts, and T-Mobile devices will continue to work without hassle.

Moreover, the purchase will not be finalized until about 12 months later and whatever changes there will be won’t happen until then.

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This was expected from T-Mobile and AT&T; when major corporations merge, they are usually intelligent enough to not anger customers with unnecessary short-term hassles.

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However, plenty of concerns have already poured out regarding the long-term implications of T-Mobile's acquisition for T-Mobile subscribers and all US cell phone users.

The principle is simple: less competition is generally good for companies and bad for consumers.

Before T-Mobile was purchased, it was a feisty competitor that chumped on the heels of AT&T and Verizon.

According to Casey Chan of Gizmodo, T-Mobile competed by:

-offering cheap plans

-offering their Fav 5 plan

-offering good customer service

-taking chances on unproven devices (Chan pointed out that it was T-Mobile that first introduced the “Android to the masses in the T-Mobile G1”)

As a result of T-Mobile’s aggressive tactics, Verizon and AT&T were forced to match T-Mobile in some of these areas in order to defend their market share.

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