As most of you know by now, an agreement has been made that will allow AT&T to buy T-Mobile USA, which is owned by Deutsche Telecom. Some of you may also know that I left my job at AT&T to go to T-Mobile. For the past few weeks I have been thinking about what this acquisition will mean for both the employees and the customers, assuming the merger is approved by the government authorities.
The announcement was a bombshell for the employees of T-Mobile, having come less than two months after the CEO Phillip Humm visited the call center with his “innovations” to improve and grow T-Mobile. You have to think that he knew this was coming. The merger is still in its beginning stages and what information I have is essentially what you have, with the exception of a couple of things that I am not allowed to mention at this point, at least until the decisions become final.
If it happens, the USA will have basically two major cell phone companies: AT&T and Verizon. Sure, Sprint is hanging in there but do you really think it won’t be swallowed up soon? AT&T will become the largest cell phone provider by a large number, something it has been after Verizon about for a very long time.
According to information provided, AT&T specifically wants T-Mobile and its employees in order to improve its own standing with J.D. Powers Customer Service score, something it has been at the bottom of for a long time while T-Mobile has taken the number one spot 10 times. The cell phone industry is not one that has a lot of trust and it has always been T-Mobile’s goal to change that customer perception. I think it has started to succeed, however, if AT&T acquires it, I fear that will set the goal back to a point where it will never be reached.
Will prices go up if the merger happens? I believe that is a definite yes. With only two competitors and only one of those really causing a threat (Verizon), prices will inevitably go up because people will not only be locked into a commitment, but only have one other alternative. Verizon and AT&T will change prices relative to one another. If Verizon goes up, AT&T will match it to ensure more revenue; if one goes down in pricing, the other will match to prevent losing customers.
As a prior AT&T employee, I know that it is all about the all mighty dollar and spending little on its employees. T-Mobile is awesome in this regard with incentives, commission on features sold, huge giveaways for selling phones, and bonuses to ensure the best people stay. AT&T promotes and gives raises based on seniority, not performance like T-Mobile. AT&T, for the most part, is unionized with the Communication Workers of America, something I used to belong to but got out for various reasons — not the least of which was the fact that it has a “No Strike” clause, which means it cannot strike for any disagreements. This, to me, takes away any power it has.
I love the wireless communication industry and hope I will be able to remain in it for some time. However, if this deal passes I may have to look at other options. A retention bonus is being offered by AT&T, half at the close of the deal and half six months after, but depending on the amount involved, it may not be enough to keep the talented people it wants.
Overall I am disappointed that T-Mobile USA has decided to go this route and sell to AT&T. I really think T-Mobile could be a powerhouse in the industry both from an employee’s perspective and the customers’. I will miss wearing the magenta “T” hat (O.K. so it’s pink) and can only hope that the deal is denied by the powers that be.
NOTE: While I am a T-Mobile employee, the opinions expressed in this blog are my own and do not in any way represent the opinions of T-Mobile or AT&T. For official announcements and information about the pending merger, please visit t-mobile.com.