Yesterday's bombshell that AT&T would be buying T-Mobile USA for $39 Billion in cash and stock send shockwaves all over the industry yesterday, but today, the aftershocks have just as much resonance. AT&T representatives have casually mentioned that T-Mobile customers will have to replace their 3G phones once the merger is approved. The mandatory upgrade is due to the fact that AT&T will be spending over $8 billion to convert T-Mobile's entire network of 3G towers to 4G, rendering T-Mobile customers 3G phones obsolete sooner or later.
The spectrum they use for third-generation services, or 3G, will be re-purposed for 4G, which is faster. That would leave current T-Mobile phones without 3G. They would need to be replaced with phones that use AT&T’s 3G frequencies. Ralph de la Vega, AT&T’s head of wireless and consumer services, said this will happen as part of the normal phone upgrade process. “There’s nothing for them to worry about … it will be done over time, in a way that’s good for customers and good for AT&T,” de la Vega said in an interview.
AT&T or T-Mobile customers need not be too concerned, SG has had confirmation that their 3G phones will continue to operate over 2G and 3G networks in the short run. Users will be able to replace their handsets through what AT&T calls "the normal upgrade process." And there's no real need to replace phones once the merger is complete since the transition will be done over several years. So even existing AT&T customers will be able to upgrade according to the normal upgrade path as their contracts dictate.
There are tons of questions and you can bet we'll keep an eye on this merger as more details emerge.
[via Yahoo Finance]