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A leaked legal filing reveals that AT&T was happy to have its 4G network cover 80% of Americans, but didn’t want to spend the $3.8 billion needed to expand it to the rest of the country.Instead, it decided to spend almost 10 times that much to buy T-Mobile.
Wireless Week got a look at the letter from the FCC’s Web site before it was taken down. Here’s the relevant bit from an AT&T lawyer:
AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 per cent of the U.S. population was the most that could be justified.
That makes sense: rural areas are sparsely populated, so AT&T didn’t want to spend all that money building towers for so few people.
AT&T says the T-Mobile buy will help it spread the costs out over a larger revenue base.
But it doesn’t pass the sniff test: AT&T was too cheap to spend $3.8 billion expanding its existing network, but is willing to spend $39 billion on an entire company … to expand its network.
sceptics might argue that AT&T is really hoping the merger will suck up two competitors at once — T-Mobile and number-three Sprint, which won’t be able to compete with the newly massive AT&T.
AT&T vigorously denied that possibility to Wireless Week, saying that the merger was the only way it could afford to roll out 4G coverage to 97% of Americans.