The Big 4 Wireless Carriers in the U.S. have suddenly become the Big 3, but not in the way many were expecting. It has been said that No. 3 Sprint was discussing a possible deal with T-Mobile USA's parent, but instead, AT&T has announced it has acquired the No. 4 largest wireless carrier in the U.S. for $39 billion.
The deal makes sense because both companies use GSM technology. Sprint uses CDMA and WiMax and would have had a tougher time integrating T-Mobile's assets. The deal would make AT&T the largest carrier in the United States, by a large margin.
At the end of 2010, AT&T had 95.5 million wireless subscribers and T-Mobile had 33.7 million subscribers, for a combined total of 129.2 million subscribers if the acquisition is approved. Verizon Wireless, meanwhile, had 94.1 million wireless customers, but was expected to overtake AT&T with the Verizon iPhone's launch.
That said, AT&T trails Verizon badly in its 4G rollout. While both AT&T and T-Mobile claim HSPA+ is 4G, most call that 3.5G, and Verizon's "still not quite 4G but better" LTE has rolled out in many parts of the nation. AT&T's LTE is not expected to reach trials until mid-2011.
This probably means an end to the T-Mobile commercials in which they mock AT&T's coverage, a video of which can be seen below. Considering the size of the deal, it's likely to face extensive federal scrutiny.
In terms of Sprint, it's unclear what this means for the No. 3 largest carrier in the U.S. It could be acquired by Verizon, as the two share CDMA technology in their 3G networks. However, Sprint has focused on WiMax for 4G, which Verizon is committed to LTE.