Road Warriors Mobilize Against Telecom Deal
Seat 2B
Mobile Professional 411
The War for the Business Traveler's Wallet
As AT&T embarks on a long, loud campaign to justify its $39 billion acquisition of T-Mobile USA, and opponents gear up to stop the combination of the second- and fourth-largest mobile operators, business travelers have a simple message: No.
No to an acquisition that would allow one company to control virtually 99 percent of the U.S. market for GSM, the world standard for mobile communications. No to the cash-and-stock deal that would give AT&T monopoly power over 130 million American subscribers who have chosen to make calls, get email, and move data on the system used by about 80 percent of world's mobile customers. And no to one private company owning America's mobile interface with the world.
From the moment last month when AT&T announced its plan to buy T-Mobile USA from Deutsche Telekom, AT&T executives have pounded home their simple messages: There's plenty of competition in the American mobile market and a merger would allow the bulked-up firm to offer better basic service and innovative new products. They promptly launched an advocacy website that spun appealing tales of a country without dropped calls and a universe of fast new connection options for a nation quickly becoming addicted to mobile data services.
Since even AT&T admits the deal might take a year to close and federal regulatory approval won't come easily, the company repeatedly hammered the competition angle. In urban market after urban market, AT&T claims, "the wireless landscape is fiercely competitive and will remain so" if AT&T were permitted to gobble up T-Mobile.
It's compelling stuff to the mobile neophyte. After all, the nation's leading mobile carrier, Verizon Wireless, is a behemoth with more than 94 million customers. There are five or six carriers in markets large and small, AT&T says, and second-tier operators such as Sprint, Leap Wireless, and US Cellular are growing and innovating fast on both price and product.
But AT&T's spin is mum on the peculiar nature of the U.S. cellular market. Unlike virtually every other nation in the world, the United States has a fractured mobile spectrum. Most of our carriers, including Verizon, No. 3 Sprint, and the smaller players, use a technology called CDMA. It's a perfectly fine system, but it's all but unknown outside North America.
As is so often the case in technological matters, most of the world marches to a different tune. The global standard is a system called GSM, and CDMA phones don't work on GSM networks. GSM is used in an estimated 220 countries and territories, and it commands more than 80 percent of the world's mobile customers. With two notable exceptions—South Korea and Japan, which have essentially proprietary systems—if you want to make a mobile call or move some mobile data, you do it on GSM.
For all intents and purposes, there are only two GSM-based mobile providers in the United States: AT&T and T-Mobile. If regulators permit AT&T to scoop up T-Mobile, American business travelers who works internationally and U.S. mobile customer who chooses to adopt the world mobile standard would be forced to buy from a single, privately owned company.
Except for the odd Pacific atoll, a few former Soviet republics, and the occasional dictatorship, no nation gives a single mobile operator a monopoly on GSM service. Throughout Europe and Asia, at least two, and often as many as five, GSM companies compete for mobile customers. AT&T's grab for T-Mobile would leave it alone in the global marketplace: A monopoly GSM operator in a developed, industrialized, democratic nation.
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