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There has been a flurry of activity surrounding the announcement of the deal by AT&T to buy T-Mobile. The deal, set at $39 billion, is one of the largest deals since the financial crisis; one wonders if such a deal would be healthy for the competition, benefit the consumers and spur innovation in the wireless industry. I can definitely see the shareholders of AT&T and T-Mobile (and the parent Deutsche Telecom) benefitting from this merger.

Personally, I cannot talk much to the general customer satisfaction of the T-Mobile customer base, but I have found T-Mobile to be very innovative and experimental in their approach to bring the latest innovations to the consumers at the earliest. I have been playing with the Android mobile OS and T-Mobile's partnership with Google has put them on the leading edge in support of the Android OS. One of the features that interested me was the Google's announcement of the C2DM (Cloud to Device Messaging) which provides the ability to send push notifications to the apps in the Android phones from a server. However, this needed one of the latest Android OS (version 2.2 aka Froyo) that supported the C2DM. My search, at that time, revealed that T-Mobile was the only provider that had a phone running the Android 2.2 OS. Both AT&T and Verizon announced that they would have the Android 2.2 OS support on their phones, but were hampered by numerous delays. I was amazed by the number of apps and services that were available for download on the T-Mobile Android 2.2 phone. The question remains if this relationship with Google will continue to thrive if the merger were to go through.

Innovation aside, this merger will create a duopoly (with AT&T and Verizon) with Sprint cellular remaining a distant third. The FCC's electronic comment system has been inundated with thousands of comments from individuals and stakeholders opposing the merger. Critics of this merger have a hard time believing the statement from AT&T Chairman and CEO, Randall Stephenson that such deals have historically led to price declines for consumers. Also, while announcing the deal, Stephenson said that the deal would "help achieve President Obama's goals for a high speed, wirelessly connected America". This provoked harsh response from the Rural Cellular Association (RCA) that the proposed merger will do nothing to benefit the consumers in the rural areas as T-Mobile does not serve these customers and does not have the low band spectrum (700 MHz) needed to serve these areas. Proponents of the deal claimed that the merger would have a positive impact on competition, better for the US workers and fuel innovation; the critics have a hard time believing that any of this is true and claim that the exact opposite is true. I have reason to believe that such mergers could negatively impact the business of network equipment vendors, handset vendors etc.

If the merger is passed, the combined AT&T will have 130 million subscribers compared to 94 million of Verizon and 34 million of Sprint Nextel. Would this propel Verizon's acquisition of Sprint? However, it will be interesting to see if this deal will be approved by the US Department of Justice and the FCC. It will be early 2012 before a decision is made.