Among the arguments raised by opponents of AT&T's proposed $39 billion acquisition of T-Mobile: the deal would remove a wireless carrier known for catering to budget-conscious consumers. Indeed, T-Mobile has long positioned itself as a lower-cost option to larger rivals, including AT&T, Verizon Wireless and Sprint. But does T-Mobile really offer better deals on service plans than AT&T?
Yes, according to a new analysis by Consumer Reports. It found that T-Mobile wireless plans typically cost $15 to $50 less per month than comparable plans from the carrier planning to swallow it. The consumer watchdog said the finding also validated concerns that T-Mobile customers migrating to AT&T plans would likely pay more for service than they would have with T-Mobile. And that T-Mobile's exit from the market would eliminate a lower-priced alternative from the market.
The Consumer Reports finding comes as Congress is preparing to scrutinize the AT&T/T-Mobile merger, with the Senate scheduled to hold its first hearing on the deal May 11. The FCC and the U.S. Department of Justice must also approve the merger before it can be completed. At the state level, New York Attorney General Eric Schneiderman recently announced plans to review the transaction.
As an example of the disparity in pricing between the two carriers, Consumer Reports noted that T-Mobile charges $50 per month for its basic 1,000-minute individual " Even More Talk" two-year contract plan, while AT&T charges $60 per month for its nearest equivalent " "Nation" plan, which includes only 900 minutes.
And the more minutes you buy, the bigger the difference.
T-Mobile's two-line, 3,000-minute Even More Talk + Text (unlimited messaging) + 200MB data two-year plan for smartphones costs $140 per month. The closest AT&T equivalent plan costs $170 a month, after adding data and messaging to the base price, but includes only 2,100 voice minutes.
In announcing the planned T-Mobile acquisition last month, AT&T stressed that the deal would bring improvements in service quality and coverage for customers of both carriers. It also argued that the U.S. wireless industry is "fiercely competitive," with five or more providers in 18 of the top 20 local markets.
Consumer Reports also pointed out that AT&T CEO Randall Stephenson has noted that in the past, such mergers have included grandfathering of service plans from the previous carriers. But "any grandfathering will almost certainly be limited to the specific plan you have when the merger takes effect," stated a CR blog post on Friday. Any significant change to a T-Mobile plan post-merger will likely mean losing access to the carrier's more thrifty plans.
The report added that pricing isn't the only difference between the carriers. It pointed to the most recent CR survey in which AT&T came in last among the four major carriers in cell-service customer satisfaction. "It's quite likely you'll be less satisfied with that new and pricier AT&T plan than with your service from T-Mobile," the post warned.