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Following AT&T's $39 billion deal to acquire T-Mobile USA, InformationWeek Analytics research finds that the initial reaction among business technology professionals is to wait and see--unless they happen to be existing T-Mobile customers. For them, fully 77% say they'll be shopping around for a new mobile communications carrier. And while it's a good bet that many would remain with the new AT&T should the deal pass regulatory muster, you can also bet that Verizon and Sprint are cranking up their marketing engines to make certain that T-Mobile customers of all stripes are aware of their options.
Just 14% of our survey respondents say T-Mobile is their company's preferred North American mobile communications carrier. But it has been the most aggressive price competitor, providing a "foil against the duopoly pricing of AT&T and Verizon," says Berge Ayvazian, a consultant with market researcher Heavy Reading. Business customers won't like losing that leverage even if T-Mobile hasn't been a big part of their spending.
Business pros are polarized on whether the Department of Justice and FCC should allow the merger: 46% of our survey respondents think the regulators should nix it--a standout percentage, as our surveys rarely find so many respondents eager for this level of government intervention. Respondents worry that prices will rise with fewer competitors.
Ayvazian notes that the deal comes with a $3 billion breakup fee AT&T must pay T-Mobile's parent, Deutsche Telekom, if the merger can't be completed. Deutsche Telekom would also get rights to some of AT&T's wireless spectrum, so either AT&T has little doubt the deal will go through or it will do whatever it takes to get approval.
The merger isn't likely to come without conditions. While customers might like some kind of promise of lower rates, the discussion is more likely to center on coverage and bandwidth utilization. "I'm worried about the future," Ayvazian says. "We've spent the past 20 years promoting competition and benefiting from competition."
Business pros have plenty of other palpable reactions besides worry, with respondents to the free-form section of our survey using terms like "horrible," "absolute worst," "disaster," "larceny" (and a few more that civility prevents us from publishing) to describe their feelings about AT&T and its cellular and customer service. But the vitriol is far from universal. The glass-half-full types hope that innovative billing and other customer-care qualities they appreciate in T-Mobile will brush off on AT&T. But the real value AT&T is seeking isn't T-Mobile's friendlier pricing and customer service.
AT&T is well aware of its own coverage and quality problems, and its rollout of LTE (its high-speed, 4G data transport technology of choice) will further stress its network, which must remain backward-compatible with phones and other devices users have now. In some markets, buying spectrum is all but impossible, making acquisitions AT&T's only option.
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