T-Mobile users fear rate increase

Minnesota T-Mobile customers are sharply divided over AT&T's planned $39 billion purchase of T-Mobile USA, which would push AT&T past its largest rival, Verizon Wireless, to become the biggest U.S. cell phone company.

The deal would eliminate T-Mobile, known as a low-price competitor among the top four cell phone companies, leaving Verizon as a close No. 2 and Sprint as a distant No. 3.

That worries Kory Lasker of Woodbury, who believes his T-Mobile smart phone service will get more expensive under AT&T.

"I pay attention to prices, and T-Mobile is the least expensive provider available and has excellent customer service," said Lasker, who has a family plan with five phones and four data plans. "I don't see why prices wouldn't go up. AT&T's prices certainly aren't going to fall to T-Mobile's level."

The pending merger, which regulators say could take a year to be cleared by government regulators, creates a host of challenges for the companies and their 130 million subscribers.

The companies use different wireless frequencies, which means T-Mobile customers eventually would have to replace their phones. Some experts say the deal is the biggest antitrust challenge to face the Obama administration.

But Sahar Amini of Minneapolis says she can't wait to become an AT&T customer.

Erick Stohr, a T-Mobile customer in Apple Valley who enjoys paying for his cell phone month-to-month without a contract, says he will look at other carriers.

"I feel strongly that I'll end up paying more money if I stay with AT&T, and that they'll start to restrict things such as non-contract cell plans," Stohr said. "I'd been considering moving to Verizon Wireless or Sprint, and this AT&T acquisition is what pushed me over the edge."

Price fears overblown?

Roger Entner, an analyst at Recon Analytics in Boston, said consumer fears that cellular phone costs would rise may be exaggerated.

"Every time there is a cell phone company merger, we hear that prices will go up," Entner said. "But it hasn't happened. Cellular prices have stayed the same or come down."

"There are certainly complaints about AT&T's network, but the actual differences between the various cellular networks are not that significant," Entner said. What's more, the combined T-Mobile/AT&T network will be less likely to drop calls because the number of cell sites will increase, he said.

Few details offered

AT&T isn't revealing much about what changes are ahead if the companies combine. It hasn't disclosed pricing plans for the new company, and won't say whether it will eliminate T-Mobile's unlimited data plan. AT&T doesn't offer an unlimited plan. In addition, AT&T won't say whether the popular iPhone or iPad will become available to T-Mobile customers.

It's unclear how many people in Minnesota would be affected -- AT&T won't disclose market share or customer numbers for the state.

It's also unclear how much the merger will cost T-Mobile customers when it comes to buying new phones.

AT&T agrees that it plans to shift T-Mobile customers to a new frequency, and that the move will require T-Mobile customers to get new phones. But AT&T said the shift would be stretched out over several years, so customers could replace their phones at the same time they normally would.

AT&T has said that one of the major benefits of the merger would be the expansion of 4G service to rural areas. But it also said the 4G network construction is just beginning, and will take seven years to cover 95 percent of the U.S. population.