In an effort to improve its service AT&T announced Sunday it will buy out its rival T-Mobile USA. The deal is estimated to be worth $39 billon. AT&T makes the purchase to be able to improve it slow Internet access, reduce dropped calls, and provide better coverage of its wireless network.
If government regulators approve the acquisition, the combined company would become the largest cellphone provider in the U.S. Some industry critics said the combination would lead to higher prices for consumers since T-Mobile's rates tend to be lower than those of AT&T or Verizon, the current No. 1 wireless carrier. And it comes as AT&T faces growing pressure from smartphone users, especially those with iPhones, who have long been frustrated with their service. Consumers have a choice since Verizon recently started selling the iPhone 4.
T-Mobile itself tapped into that dissatisfaction with a series of taunting commercials -- featuring a young woman in a pink and white dress mocking AT&T-encumbered iPhone users -- that have resonated with irritated customers in San Francisco, where a few thousand smartphone users on The Embarcadero can swamp AT&T's network.
The boards of Deutsche Telekom AG, which owns T-Mobile USA, and AT&T have already approved the merger, which would give AT&T 129 million subscribers and control of about 43 percent of the American cellphone market. It would also leave Verizon and Sprint as the only other carriers with national networks -- all reasons the acquisition is sure to receive intense scrutiny from the Federal Communications Commission, which has been trying to promote increased competition in the industry.
In a conference call with the Mercury News and five other news outlets, AT&T Chairman and CEO Randall Stephenson said the proposed deal -- the first blockbuster acquisition since the recession was declared over last year -- was driven by the explosive growth in the use of smartphones. AT&T's mobile broadband traffic has risen 8,000 percent in the past four years, and it needed a way to expand its network.
The company figures an additional 46 million customers will gain access to AT&T's 4G mobile network when it begins to roll out later this year.
Putting the two networks together would boost network capacity in most urban areas.
Despite its commercials, there is some debate about whether the service T-Mobile currently provides is truly 4G. The GSM technology the two companies use is basically the same, which is why they chose each other in the first place. But T-Mobile offers usage plans that are considerably less costly than AT&T's, and often come without the requirement of a two-year commitment. AT&T acknowledged that T-Mobile customers pay significantly lower prices than AT&T's, which they said the company hopes to change by herding more T-Mobile customers toward its more expensive smartphone plans. But they noted that previous combinations, such as Verizon's acquisition of Alltel in 2009, have resulted in lower prices. But critics said the opposite will happen because of less competition.
15 March 2011
Gilbert Gottfried is known for unique voice that, until recently, was that of the Aflac duck mascot. Aflac on Monday, March 14, 2011 announced that it has severed ties with Gottfried over jokes about the earthquake and tsunami in Japan that the comedian posted on Twitter.
Aflac Inc. said Monday it has fired Gilbert Gottfried, the abrasive voice of the insurer's quacking duck in the U.S., after the comedian posted a string of mocking jokes about the earthquake and tsunami in Japan on Twitter over the weekend.
The tasteless tweets are particularly problematic for Aflac because it does 75 percent of its business in Japan. One in four homes in Japan buys health insurance from Aflac. The insurer's CEO, Daniel Amos, flew to Japan on Sunday to show support for the company's employees and agents.
Aflac said in a statement Monday that Gottfried's jokes do not represent the feelings of the company, which previously announced it would donate 100 million yen ($1.2 million) to the International Red Cross to help with disaster assistance.
The tweets in question were removed from Gottfried's Twitter feed Monday after Aflac announced it would stop working with the comedian.
Gottfried has voiced the duck in numerous Aflac commercials since 2000. His career includes a run as a cast member on "Saturday Night Live" and a role as the voice of the parrot in Disney's "Aladdin." He has also recorded a 50-minute show of dirty jokes.
The insurer said it will start a casting search for his replacement. The company also noted that Gottfried is not the voice of the duck in Japan. Aflac's mascot has a softer, sweeter voice in Japanese commercials.
Aflac is gearing up for an influx of claims in the wake of the disaster, though it expects only a minimal financial impact to total results. The company, which has been doing business in Japan since 1974, said less than 5 percent of Aflac Japan's new sales and in-force premiums come from the hard-hit Iwate, Miyagi and Fukushima prefectures there.