Friday, July 22, 2011

Analysts put bets on AT&T, T-Mobile merger

As part of its continuing network investment to support growing demand for advanced mobile devices and applications, AT&T* today announced the activation of new mobile broadband cell sites that will enhance coverage for area residents and businesses in Somerset, Stoystown, Central City, Friedens, Jenners, Quecreek and Boswell. Coverage was also expanded to portions of the Pennsylvania Turnpike, US 219 and State Routes 31, 281, 30, 160 and 31. With mobile broadband speeds, AT&T customers can surf the Web, download files faster, and enjoy the very latest interactive mobile applications.

The new cell sites are one part of AT&T's ongoing efforts to drive investment and innovation to deliver the nation's best, most advanced mobile broadband experience for customers. With the nation's fastest mobile broadband network, AT&T provides accelerated mobile data speeds and simultaneous voice and data capabilities.

"Delivering dependable wireless coverage for consumers and businesses who need to stay connected is our ultimate objective," said J. Michael Schweder, president, AT&T Pennsylvania. "AT&T's ongoing investments in the Somerset area will help ensure that our customers have access to the wireless services that help drive economic growth."

"Our goal is for our customers to have an extraordinary experience. As part of these communities, we're always looking for new opportunities to provide enhanced coverage, and our investment in the local wireless network is just one way we're accomplishing that," said Larry Evans, vice president and general manager, AT&T Ohio and western Pennsylvania. "In addition, our recently announced agreement to acquire T-Mobile USA will strengthen and expand our network in Somerset and the surrounding communities. If approved, this deal means that we'll be able to expand the next generation of mobile broadband - 4G LTE - from our current plan of 80 percent of the U.S. population to more than 97 percent."

AT&T's mobile broadband network is based on the 3rd Generation Partnership Project (3GPP) family of technologies that includes GSM and UMTS, the most widely used wireless network platforms in the world. AT&T has the broadest international coverage of any U.S. wireless provider, providing access to voice service in more than 220 countries and data service in more than 200 countries. AT&T also offers voice and data roaming coverage on more than 135 major cruise ships, as well as mobile broadband services in more than 130 countries.

AT&T also operates the nation's largest Wi-Fi network** with more than 24,000 hotspots in the U.S. and provides access to more than 135,000 hotspots globally through roaming agreements. Most AT&T smartphone customers get access to our entire national Wi-Fi network at no additional cost, and Wi-Fi usage doesn't count against customers' monthly wireless data plans.

For more information about AT&T's coverage in Pennsylvania or anywhere in the United States, consumers can visit the AT&T Coverage Viewer. Using the online tool, AT&T customers can measure quality of coverage from a street address, intersection, ZIP code or even a landmark.

Importantly, the merger comes amid a presidential election campaign. Even though it would concentrate the wireless market — putting 80 percent of all cell phone contracts into the hands of two carriers — AT&T and T-Mobile promise to create jobs and extend wireless connections to rural areas faster than previously planned.

Analysts such as Craig Moffett at Sanford C. Bernstein say they still believe the deal will be approved, even as the administration searches for a new head of antitrust at Justice.

AT&T is quick to point to public officials who support its deal and has a union saying the merger will create new jobs. More than 70 Democratic lawmakers and 26 governors have expressed support of the merger.

But this week, things got a little harder for AT&T, analysts say.

Kohl’s letter, along with a separate letter by three key Democratic House lawmakers saying the deal was a step “backward,” carry some influence among antitrust regulators, said Rebecca Arbogast, an analyst at Stifel Nicolaus.

Kohl “could be something of a barometer for mainstream Democratic antitrust thinking, and if nothing else, provide some political cover for opponents in the face of the strong AT&T lobbying campaign,” Arbogast said.

The Senate head of antitrust issues expressed several concerns about concentration in the market and possible harm to consumers.

Regulators may place stronger conditions on their approval — such as the divestiture of spectrum and other assets. Analysts question who will be in a position to buy those assets, however.

Critics of the proposal say the tide may have turned against AT&T and T-Mobile.

Gigi Sohn, president of public interest group Public Knowledge, said the FCC’s decision indicates that AT&T is struggling to convince regulators to approve the deal and has come up with new arguments.

The FCC said it paused the review because of a “new model” that AT&T relies on for winning approval from the agency. The wireless giant will reveal the new model on July 25. But AT&T downplayed the significance of the event.

The company said the material it presents won’t show a shift in economic or any other analysis but will be additional information to supplement previous comments.

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