AT&T Internet Usage Cap and T-Mobile USA Acquisition

There is always something going on in and around a company like AT&T. Here is some of the news.

AT&T to Implement Monthly Usage Cap for DSL and U-verse Users

On May 2, 2011, AT&T will implement a monthly usage cap for its High Speed Internet service subscribers. The limit will be 150GB for AT&T DSL and 250GB for Uverse Internet users.
For those that go over the proposed limit, there will be a fee of $10 for each 50GB of data.
Now, per AT&T, the Internet usage limitation will not be enforced on monthly bases but only when a user exceeds the cap three times across the life of the user’s account.
AT&T claims that an average user uses 18GB of data in one month, and that the changes should affect only about 2% of their users. There will be a notification system in place which will inform users when they exceed 65%, 90% and 100% of the monthly usage allowance.
As the Internet usage is becoming heavier every day (movies, audio, gaming), and the competition is constantly presented, use your own judgment in determining this AT&T’s move.

AT&T to Acquire T-Mobile USA from Deutsche Telekom

The Boards of Directors of both companies, AT&T and Deutsche Telekom, have agreed to the acquisition of T-Mobile USA by AT&T. The worth of this deal is $39 billion.
Here is what AT&T has posted in their news wire:

  • Provides fast, efficient and certain solution to impending spectrum exhaust challenges facing AT&T and T-Mobile USA in key markets due to explosive demand for mobile broadband
  • Enhances network capacity, output and quality in near term for both companies’ customers
  • AT&T commits to expand 4G LTE deployment to an additional 46.5 million Americans, including in rural, smaller communities, for a total of 294 million or 95% of the U.S. population
  • Provides 4G LTE service for T-Mobile USA’s 34 million subscribers
  • More than $8 billion in incremental infrastructure spend by a U.S. company over seven years, enabling nation’s high-tech industry, innovation and economic growth
  • Creates substantial value for AT&T shareholders through large, straightforward synergies

The acquisition is subject to regulatory approvals, a reverse breakup fee in certain circumstances, and other customary regulatory and other closing conditions. The transaction is expected to close in approximately 12 months.
The greatest question is about the fact that, if approved, this acquisition will make AT&T hold about 43% of cell phone market in United States, having around 130 million customers. How will that affect the market in the terms of signal quality and price? AT&T Wireless is certainly aiming becoming big.