When dinosaurs mate: AT&T and Deutsche Telekom
FCC weighs up a Big One
Soon there may be only once place to go for Americans who want to use their phone abroad: the monopoly GSM supplier will be AT&T Wireless. This is not just any old monopoly, though. It has a special place in American infamy.
People who think they understand the United States, but only visit and have never lived there, are taken aback when they being to realise the deep-rooted antipathy of consumers towards the company they called the "Death Star". Loathing of AT&T really crosses all social boundaries, classes and tastes. Americans would throw garlic and make the sign of the cross at the mere mention of AT&T or one of the RBOCs (Regional Bell Operating Companies), such as PacBell. It's easy to forget that the "People of the United States" spent almost 60 years fighting the Bell monopoly. Yet, in barely 30 years since the Supreme Court-ordered breakup in 1982, it has mechanically reconstituted itself – a bit like two giant, animatronic doner kebabs. And one of these even has the brazen cheek to call itself AT&T. Well, that was 60 years of litigation well-spent ...
As a punter, I found AT&T Wireless never quite lived up to the horror billing. Energy utilities and even newspapers were even more incompetent. Of course, the company was always marked by the institutional decrepitude that goes with any former state monopoly, but that was no surprise. In Europe, we'd all grown up with them.
In the Bay Area, I was one of the first happy subscribers on AT&T Wireless' newly revamped GPRS network in 2002, in spectrum still used by its GSM-that-wasn't-GSM technology, TDMA. Of course it was a great network – nobody else was using it. It was so new, the paint was still wet. It got even better as TDMA was gradually turned off.
For me, the problems only started when another of the RBOCs-turned-kebab acquired ATTW through gravitational attraction. SBC took over, and for three years the operation was called Cingular. Prices went up and quality fell through the floor, and all of a sudden we started to hear how the Bay Area was a "challenging topology" for mobile network operators. It had been strangely fine before. Just it was fine for Verizon and the CDMA operators, at least in the urban counties. Maybe dozens of new hills had sprung up in San Francisco – and nobody had noticed.
But as AT&T Wireless got going in the 850Mhz spectrum, there was a glimmer of competition of sorts. Deutsche Telekom launched in 2002 with the T-Mobile brand. There was now somewhere to go if you wanted a GSM phone. The problem was DT was the worst of the debt-laden operators, so it made the most of very little. It had the PCS 1900Mhz spectrum, which was not as prime as the 850Mhz frequencies used by ATTW. It concentrated on a select few areas – actually building up a decent reputation in New York. But it didn't challenge with tariffs or a wider choice of better handsets.
When I last returned to the Bay Area, T-Mobile had become much sharper – learning that competition means something other than standing around and winning custom by default. It has made much more serious capital investment, building out an 3.5G HSPA network it calls 4G. Some of these improvements were simply ancient European ideas that nobody had brought along before, such as prepay. Or prepay SIMs. But I'm surprised today to read that people say they're surprised, because T-Mobile has never made the kind of ambitious noises that suggested it was ever going be anything other than a contended Fourth Player awaiting a takeover. T-Mobile always looked like an acquisition target to me – and there was only ever going to be one acquirer.
This is a disaster for T-Mobile customers
AT&T is quite open that the motivation on their side is that their present infrastructure is saturated in cities like New York and San Fransisco. AT&T said that even if they get the approval to build more towers, it would take them about 5 years to get to where they'd be overnight with a T-Mobile acquisition. So for AT&T customers, they will see an improvement in service as AT&T starts piping service over the T-Mobile infrastructure. But the T-Mobile customers will only see a degradation, as the AT&T infrastructure will add nothing to their service as its already saturated. Add to the fact that AT&T charges higher rates for all services than T-Mobile does, this merger is just a giant screw of all existing T-Mobile customers on both price and service.
"launched in 2002"?
2002 was when T-Mobile acquired VoiceStream -- which itself acquired Omnipoint in 1999 -- which had been in the prepaid GSM business since 1996. I used the same prepaid GSM phone number from 1997 on, even though the company didn't call itself "T-Mobile" until five years later.
Gotta agree about the perceived horror of the Death Star, though!
I really hope that this deal fails - the last thing that the US consumers need is fewer choices.