In a shocker that promises to reshape the U.S. mobile industry, AT&T this afternoon announced a definitive agreement to buy Bellevue-based T-Mobile USA from its parent company, Deutsche Telecom, in a cash-and-stock deal valued at $39 billion.

The deal, already approved by the boards of both companies, would unite one of the largest carriers in the country with the No. 4 player in the market. It’s a surprise in part because Sprint had been considered a more likely acquirer of T-Mobile.

The acquisition is subject to regulatory approvals and isn’t expected to close for 12 months — a sign of just how mammoth the purchase is.

In the news release announcing the deal, AT&T previews the case it will make to regulators about the implications of the deal for the wireless market.

The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market. For example, in 18 of the top 20 U.S. local markets, there are five or more providers. Local market competition is escalating among larger carriers, low-cost carriers and several regional wireless players with nationwide service plans. This intense competition is only increasing with the build-out of new 4G networks and the emergence of new market entrants.

AT&T is promising better voice coverage and service as a result of combining their networks. “At closing, AT&T will immediately gain cell sites equivalent to what would have taken on average five years to build without the transaction, and double that in some markets,” the company says.

Follow-up: Exclusive: T-Mobile USA CEO to employees: Sale to AT&T ‘the best possible solution’

What about the impact on the Seattle region from an economic perspective? From AT&T’s announcement (emphasis added):

“Bringing AT&T and T-Mobile USA together will create an impressive workforce that is best positioned to compete in today’s global economy. Post-closing, AT&T intends to tap into the significant knowledge and expertise held by employees of both AT&T and T-Mobile USA to succeed. AT&T is the only major U.S. wireless company with a union workforce, offering leading wages, benefits, training and development for employees. The combined company will continue to have a strong employee and operations base in the Seattle area.”

On another front, presumably this means the end of those T-Mobile ads poking fun at AT&T?

Potentially smoothing the combination of the networks, AT&T and T-Mobile both operate on the GSM mobile standard, one reason they were both the first in the U.S. to carry Microsoft’s Windows Phone 7.

Comments

  • http://www.facebook.com/rwoan Ronald S Woan

    Good point about the T-Mobile ads slamming AT&T. Hopefully combined entity will keep the T-Mobile pitchwoman and combine them with the AT&T Windows Phone animated characters :-)

  • Some Guy

    Friday at T-Mobile: Fire up the troops by reviling AT&T

    Monday at T-Mobile: Oops. We just got bought by AT&T

    Should be an interesting all-company conference call.

  • Chuck Goolsbee

    A sad day for those of us customers who fled AT&T for T-mo’s far better customer service.

    • http://twitter.com/Ericanista Erica Oh Martinetti

      Where to go now, is the question. Any suggestions, let me know. Take into consideration that a Verizon/Sprint merger is probably next …

  • Guest

    This is terrible news for the local economy. There will be a lot of redundant positions and layoffs. Bad news for consumers overall with only ONE GSM carrier in the country. AT&T were bad when they weren’t a monopoly.

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