The Federal Communication Commission is asking for more details on its 4G LTE rollout in an attempt to give more scrutiny to the proposed T-Mobile acquistion.
As you may recall, AT&T is attempting to purchase T-Mobile for about $36 billion in a move to make it the nation’s largest carrier and give it a ton of usable spectrum. One of the major reasons it says the deal does through is because the move would enable it to roll out 4G LTE to nearly every inch of the country, including rural areas which generally get the short stick when it comes to mobile data.
The only issue is that a recent letter from AT&T made its way to the web, fully uncensored which said that AT&T would be able to cover about 97 percent of the nation with 4G LTE for about $3.8 billion. If it only costs $3.8 billion for AT&T to cover most of the nation, then why is AT&T going to spend 10 times that to buy T-Mobile to achieve that same amount of coverage? That’s a question the FCC is taking a harder look at.
When the letter first came out, many saw this as a “smoking gun” about AT&T lying about its real ambitions. I’m not quite buying that. Yes, AT&T probably overstated its case for buying T-Mobile to spread 4G LTE but the spectrum issue is a real one. The government will be auctioning off at least 500 MHz over the next few years but buying T-Mobile and its assets (towers, stores) will give AT&T a major advantage going forward.