That’s something all of us with AT&T phones already knew based on call quality. I have a personal Verizon phone (Samsung Android) and a company-issued AT&T phone (Blackberry), and I’ve almost entirely stopped using the company phone during my commute because of dropped calls — almost all of which have disappeared with Verizon.
The best thing that ever happened to AT&T was Apple’s iPhone ; it was also the worst thing, because it amplified the flaws inherent in AT&T’s network.
Which is why this deal appears to be born out of weakness, not strength: If nothing else, it broadens AT&T’s network and possibly fixes quality issues by buying rather than building the additional infrastructure needed to effectively compete.
Therein lies the roll-of-the-dice of this deal: Even with T-Mobile, will customers give AT&T a second chance?
As part of the deal, it will push its debt levels to the highest levels ever (certainly in recent years) while cash sinks to among the lowest levels.
And if the deal fails, it will pay Deutsche Telecom a breakup fee that, according to published reports, is $3 billion — not good for a company that has only $1.4 billion in cash.
Deutsche Telekom, meanwhile, walks away with either the breakup fee or $25 billion in cash and another $14 billion in AT&T stock , a nice riskless call on deal’s ultimate outcome.
There’s no question who came into this transaction from a position of strength. Hint: It wasn’t AT&T.
And this note: If you want to vote on who you think is smarter in this deal — the seller or the buyer — vote now.
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