AT&T to Acquire T-Mobile USA For $39 Billion [Updated]

AT&T and Deutsche Telekom have agreed the sale of T-Mobile USA for $39 billion in cash and stocks. The combined customer base of the telecoms giant will be 130 million users, over 40% of the US population.

As part of the deal, Deutsche Telekom will walk away with 8% equity stake in AT&T and a position on the AT&T Board of Directors.

With a customer base totalling 130 million users, Verizon will be left trailing with 94.1 million according to figures from the end of last year. Assuming the deal goes ahead, it would make AT&T the United States’ largest wireless carrier by some margin.

It’s a bold move by AT&T and in large part a response to the endless complaints about the poor quality of its network.

In a statement, AT&T’s Chairman and CEO Randall Stephenson had this to say:

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“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future…It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people.”

The agreement has been approved by the Boards of Directors of both companies but is likely to come under strong government scrutiny.

Update:

T-Mobile has posted a Q&A on its company blog answering some of the questions current T-Mobile customers may have:

Will my service change?

There is no change in your service and we remain committed to ensuring you have the best experience possible experience using your T-Mobile USA products and services.

Will I now be billed by AT&T?

No, your billing remains exactly the same. T-Mobile USA continues to operate as an independent company. As always, you would receive advance notice to any changes to your services.

Why is T-Mobile USA doing this?

Bringing together these two world-class businesses will create significant benefits for customers. The merger will ensure the deployment of a robust 4G LTE network to 95% of the U.S. population, something neither company would achieve on its own. Also, because of our compatible networks and spectrum, the customers of T-Mobile USA and AT&T will experience improved voice and data service almost immediately after the networks are integrated.

Will T-Mobile USA’s quality be reduced?

No. In fact, the combination of AT&T and T-Mobile USA will offer an even stronger service to customers. Until the acquisition is closed, we will work hard to maintain our position as the value leader with America’s largest 4G network.

If the acquisition closes, will I still be able to use my T-Mobile USA phone?

Yes. Your T-Mobile USA device will operate the same in the future as it does today.

Should I wait to sign-up with T-Mobile USA or upgrade my phone?

No, T-Mobile USA offers the latest wireless devices that are affordable on America’s Largest 4G Network and the combination of AT&T and T-Mobile USA will mean even stronger service for our customers. Now is a great time to be a T-Mobile customer.

Is T-Mobile USA getting the iPhone?

T-Mobile USA remains an independent company. The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G.

Will my rate plan change because of the acquisition?

We will honor all contracted plans that are entered into before the change of ownership.