AT&T, T-Mobile Deal, what it means for M2M and RACO Wireless

In light of AT&T’s aborted deal to acquire T-Mobile’s North American assets, it remains to be seen how this will affect the M2M industry.  T-Mobile’s M2M group in North America was led by John Horn, who recently left the company (with much of his team) for RACO Wireless, with the understanding that RACO would manage T-Mobile’s successful 2G services for M2M in the region. In an exclusive interview with John Horn, now president of RACO Wireless (Cincinnati, Ohio, U.S.A.), M2M Zone learned where RACO stands in the aftermath of the failed $39 billion deal.  Last week, the company announced it was on pace for a 300% year-over-year growth for 2011. Horn stands by his belief that the M2M industry needs 2G technology, even as telecom providers rush toward 4G and LTE service adoption.  AT&T is at the forefront of the 4G/LTE adoption, which perhaps sheds some light on Horn’s reasons for leaving T-Mobile for RACO. Once the acquisition was complete, RACO could have been left to inherit T-Mobile’s 2G services for M2M.

But on Monday, AT&T dropped its bid for T-Mobile due to increased regulatory opposition and left T-Mobile and RACO without AT&T, which could potentially be beneficial to 2G in M2M.

“T-Mobile not being part of AT&T I think actually even strengthens the position in the marketplace. There were a lot of questions that asked is AT&T going to come in and force you to change anyway,” says Horn. “We are not walking away from 2G by any stretch of the imagination.”

Even with this commitment to 2G in M2M, T-Mobile’s future is still uncertain, with Deutsche Telekom eager to leave the U.S. market.  With most carriers pushing for 4G, any acquisition brings up the same question.

“T-Mobile is still committed to 2G long-term.  We [RACO] are committed to 2G long term,” says Horn. “At the same time, the T-Mobile HSPA+ network, which is basically a 4G network, is rock solid and doing well… We are also deeply involved in the 3G market as well; we’re not going to abandon that.  But at the same time, we are not going to go and force people to go to 3G when the 2G still makes sense for their model.”

An acquisition of T-Mobile seems almost inevitable as the market becomes more competitive. But if an acquisition does not happen in the near future, many may ask what will become of T-Mobile.

“There is a lot of stuff in the media asking how T-Mobile is going to survive and my question is how is AT&T going to survive.  AT&T hasn’t done anything to improve their position in the last twelve months; they were depending on T-Mobile to improve it for them,” says Horn.

According to Horn, T-Mobile has done a good job considering the “cloud of AT&T’s acquisition” hanging over them.

“I don’t know what Deutsche Telekom is going to do next, but I think T-Mobile can still be a formidable competitor out in the marketplace.”

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