AT&T (T) and T-Mobile again....
Let's look at the basics.
We'll start with what I have now:
- Two lines, unlimited voice minutes: $89.98
- Unlimited (family) messages: $9.99
- Family allowances: $2.00 (allows limiting your kid's phone, dialed numbers, etc)
- Unlimited Android Data, one line: $20.00
Total before taxes: $121.97
Now this is a loyalty plan. I priced the same thing today on T-Mobile's web site and got $119 (talk and text) + $30 for $149, plus the $2 for family allowances for a total of $151, again, before taxes, so I have a $30 monthly discount for customer loyalty.
Now let's go over to AT&T.
- Base plan: $119.00 (unlimited talk, no messages or data)
- 4GB Data, highest they permit (T-Mobile is 5GB then throttled, no overcharge): $45 per line
- Unlimited family messaging: $30
Total is $194.00, again before taxes and fees.
Are they insane?
That's 28.4% more than T-Mobile's price for a new account today and a whopping 59% more than I'm paying now for as close to what I can get (I lose 1GB of data allocation, plus I risk overage charges - T-Mobile does not charge overage, but they will throttle your connection to 150kbps if you go over the soft cap.)
Oh, and let's add to this - I have no contract as my term is expired.
Verizon (VZ), incidentally, matches the voice and their data is $30 instead of $45. But they do not permit tethering at all (AT&T does on the 4G plan, and T-Mobile does on my grandfathered plan.) Verizon, however, has no truly unlimited text message option and their text message plans are very expensive by comparison, as they're per line instead of for the entire account. All-in if you're somewhat-restrained they're about the same price as AT&T. If not, you're going to get hammered on the texts, while on AT&T you risk being hammered on data.
Sprint (S) winds up being materially cheaper if the majority of your calls are to mobile phones. If you can live with landline calls restricted to 1500 minutes, you can have unlimited everything else (including mobile to mobile on any network, data on both lines and unlimited messages) for $130 - plus $20 for two "advanced" phones. That's roughly equal to T-Mobile even with the loyalty discount, provided you don't make a lot of calls to or from landlines, as it includes data on both circuits, and is a significant win without the loyalty discount.
Then of course there are the MVNOs, and they're compelling. The most-compelling is Virgin Mobile, which has a $60 "all you can eat" plan per-circuit, including data, messaging and voice. If you're in their coverage area that's a screaming deal, and if you can live with 1500 voice minutes it's even better, costing just $40. If you don't need a "smartphone" (e.g. Android, etc) then Straight Talk is pretty-much impossible to beat, as it's $45 a month "all you can eat." The only "gotcha" is not Android devices or Blackberries. Finally, the MVNOs are no taxes added on - on a "traditional" plan taxes are typically anywhere from 15-20% of the total bill, so (for example) my total with taxes is $141.
There's no chance that AT&T is going to get people to pay thirty to sixty percent more for the same service. Not a snowball's chance in Hell, and especially not when they can jump to either Sprint or one of the MVNOs. It's not worth moving to Sprint for me today only because I'm out of contract.
It's rumored that AT&T intends to take the T-Mobile towers and use them for LTE. That's a cute way to try to force migration to AT&Ts exorbitant pricing. See, on GSM/EDGE (2.5g) most modern phones will work on both the 1900 and 850 frequencies used in the US, so T-Mobile customers will be able to access AT&Ts towers (assuming, of course, they enable registration - at present in my area it is barred) and make calls, send texts, and use 2.5g (~150kbps) data speeds.
But - there is no 3g cross-system compatibility in the installed base of phones at all.
The problem is frequencies. T-Mobile uses what is called "AWS", which is a funny split-frequency system. They're the only carrier that uses this band and with a few possible (unconfirmed at this point) exceptions, most-notably the Samsung Galaxy series phones, any phone compatible with AWS frequencies for 3g service is not compatible with AT&T's 3g frequencies, and vice-versa.
What this means is that if you're a T-Mobile customer and currently enjoying 3g service when this cutover is complete you're going to lose it unless you buy a new device from AT&T and agree to upgrade. They will almost-certainly force you to change your service plan at that time, which means the aforementioned 30 or 60% increase in price. Welcome to cellphone bill Hell.
If you don't upgrade your device you'll wind up stuck in 2g land with the ability to make calls and send messages but your data performance will be permanently degraded to 150kbps.
If - and only if - AT&T allows current T-Mobile customers to buy new handsets either independently of the company or at full retail without tampering with grandfathered rates and pricing they might get away with it for current customers. They'll still get cannibalized to some extent by Sprint, which will take all the customers looking for a better price on new service, since both AT&T and Verizon are essentially-identical, but the existing customer base - for a time - might stay.
But if AT&T does what I expect them to do - that is, force migration either through handset upgrade cycles or otherwise off the existing T-Mobile billing plans, I bet they lose 90% of the customer base to Sprint and the MVNOs, essentially tossing whatever part of their acquisition they allocated to customer base in the trash.
In those places where T-Mobile had expansion to 3g planned but not yet installed it's even worse. Sales are going to go to zero immediately for them in these areas, since those who want 3g service will now go to Sprint as there is never going to be a 3g service on that network available in the future without being hosed with a price increase, as expansion for T-Mobile's 3g network has almost-certainly already been put on a full and immediate halt.
My bet is that in the fullness of time the only thing AT&T gets out of this is the spectrum, and that assumes the deal is allowed to close by the FCC. This is not a foregone conclusion, although given the way our government has been playing hand-maiden to business interests of late I wouldn't be shocked if they let it go through.
For T-Mobile if the deal is scuttled they may have been dealt a mortal blow, as I can't imagine how they get out of this one with their hide intact given the customer add and churn damage they're going to take over the next 12 months.
As far as consumers go, bend over - you've lost a material competitor in the marketplace to an acquiring company that has price points 30-60% above what the swallowed competitor was charging.
You're going to get reamed on this deal - guaranteed.