AT&T Most Likely Will Consolidate & Use T-Mobile Spectrum for LTE, Says IHS iSuppli


When AT&T buys T-Mobile, it will use acquisitions to gain control of more of the limited supply of wireless spectrum required to compete in the market for 4G services.  We no longer see those tongue-in-cheek commercials where the the T-Mobile spokesmodel in the
pink dress tells the scruffy AT&T guy that the T-Mobile 4G network
has much faster speeds (especially with the Samsung Galaxy S 4G).

The 4G segment is a fast-growing portion of the wireless market in North America.  Subscriptions to 4G in North America took off in 2010, and the service has become a competitive differentiator for AT&T and competitor Sprint.

The T-Mobile deal is the second acquisition that AT&T has undertaken recently that will give it additional 4G spectrum.  AT&T in December 2010 expanded its long-term evolution (LTE) downlink bandwidth by acquiring Qualcomm Inc.'s defunct MediaFlo mobile TV service.

The addition of T-Mobile's spectrum will allow AT&T to immediately gain network capacity and to gain a better competitive position against Sprint and Verizon Wireless, reported IHS.

AT&T has two options for how to use the T-Mobile spectrum.  First, AT&T could continue running the two companies separately since the two have very distinct subscriber bases.

IHS believes that AT&T is more likely to use T-Mobile's 1700 band spectrum for its LTE 4G service.  This move will require the consolidation of the companies' 3G networks, migrating T-Mobile 3G customers to AT&T's legacy network, as well as offering the option of a discounted upgrade to T-Mobile's existing 3G customers who don't have the devices to support AT&T's bands.  This process could be lengthy.