Telecom & Wireless
AT&T/T-Mobile Deal May Not Help Apple
Published:
Last Updated:
Apple (NASDAQ: AAPL), the preeminent provider of smartphones to AT&T (NYSE: T) Wireless, may not get any new customers if its deal with Deutsche Telekom AG to acquire T-Mobile USA goes through. Verizon Wireless and Sprint have already been pegged as losers because AT&T will have the most wireless customers in America after it closes the $39 billion transaction.
T-Mobile’s network structure and wireless technology are not identical to AT&T’s. Apple iPhones and iPads may not work on the T-Mobile system. More importantly, there is no reason to believe that AT&T has a contract with Apple that allows for distribution across another wireless system. AT&T may have to go to Apple to negotiate an expanded partnership which could take months.
AT&T may not have months to set a new deal 3G with Apple. Verizon has begun to launch and LTE 4G network. So has AT&T. The T-Mobile upgrade to LTE 4G may happen more slowly. Apple will almost certainly have a 4G iPhone in the market this year. Sales of its 3G model may fall off before T-Mobile has upgraded its network. Consumers who want the “best” iPhone will be buyers of its 4G versions and not its 3G models.
Apple may appear to be an early and big winner because of the T-Mobile transaction, but there are no details indicating that is the case.
Douglas A. McIntyre
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.