US TELCO AT&T has invested a massive £24 billion ($39 billion) to buy Deutsche Telekom's T-Mobile business in the US in a deal that sees it increase the scale of its operations and win back important Iphone business.
Earlier this year AT&T's four year sole-seller deal on the Iphone ended when Apple announced that Verizon would also be able to sell the handsets. This loosening of AT&T's market grip might have influenced its decision to splash out on the Android-favouring T-Mobile business.
The deal has been accepted by the boards at both firms but is still up for regulatory approval. Once completed, AT&T expects that it will give it extra spectrum capacity and increase coverage for its users, particularly in 4G and LTE connections.
The firm estimates that it will be able to expand its 4G coverage so that it reaches 95 per cent of the US population.
"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T chairman and CEO.
"This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers' current demands, build for the future and help achieve the President's goals for a high-speed, wirelessly connected America."
The US wireless industry is hotly contested, and AT&T said that it expects the deal to help it meet increased demands for mobile data. It said that since it has traditionally led the US smartphone, tablet and e-reader markets, it needs T-Mobile's spectrum to boost the network it offers.
AT&T has often been accused of having signal strength problems, and it added that customers should expect to see improvements in voice quality through its increased number of cell towers and larger network infrastructure.
Rural areas are expected to be well provided for, while AT&T said that the deal will directly benefit 46.5 million Americans. Not all of which, we assume, are shareholders. µ
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