Bad for Bellevue, or a Chance to Innovate? How Would AT&T's Acquisition of T-Mobile Affect the City?

The jury is still out on how AT&T's proposed  acquisition of Bellevue-based T-Mobile will affect the city.

The company--headquartered in the Factoria neighborhood--will be a part of AT&T in about 12 months if federal regulators , of Bonn, Germany.

Thomas Boydell, manager of the city's Office of Economic Development, said that the acquisition is not necessarily bad news for Bellevue tech workers, and shows that T-Mobile remains a strong company.

"We congratulate T-Mobile for positioning themselves to make this deal," Boydell said.

Boydell pointed out that 45 percent of the regional employment in the telecommunications field is in Bellevue, and many of those employees work for companies other than the major wireless service providers. Examples include software developers for mobile platforms and medical device companies that may use mobile platforms.

"It's the talent pool, not the companies themselves, that are significant," Boydell said.

He said that in the long run, the merger could have a positive impact on the local workforce.

"The character for Bellevue and the Eastside is the creativity and entrepreneurialism and the amount of knowledge that is here," he said.

According to a T-Mobile spokeswoman, it employs 3,300 T-Mobile employees in the Seattle area--about 9 percent of its workforce nationwide--including retail store representatives, engineers and operational functions in the Bellevue corporate headquarters.

AT&T, based in Dallas, has maintained that the company "will maintain a significant operational presence in the Seattle and Bellevue area."

However, AT&T would retire the T-Mobile brand when the acquisition is finalized, and the company already has many of the same positions locally, including retail stores. In addition, Bellevue would lose the headquarters of a national company that has wireless service revenues of $18.7 billion and 34 million customers.

"We've been pretty proud to have someone of their stature be in Bellevue," said Mayor Don Davidson.

"They are a mainstay here, so the local impacts, you just don't know," he said. "They've been supportive. They've had employees serve on our boards."

The company has had a longtime northwest presence.

According to T-Mobile, the company began as Western Wireless in 1994 in a merger of General Cellular and Pacific Northwest Cellular. After a public offering, Western Wireless became VoiceStream Wireless, which grew to 7 million customers, according to the company history.

The company was acquired by Deutsche Telekom AG,  a telecommunications company based in Bonn, Germany, in 2001, and was rebranded as T-Mobile USA the following year.

T-Mobile started offering the BlackBerry smartphone with email and phone service in 2002--the first year the device was marketed--and the company also spread its reach through Internet access for its customers at Borders and more than 100 airports throughout the country. National ads for the company featured at different times Jamie Lee Curtis and Catherine Zeta Jones.

The company has grown to 34 million wireless subscribers with wireless service revenues of $18.7 billion.

Still, those figures are dwarfed by AT&T's 96 million subscribers and $53.5 billion in wireless service revenues, according to the companies' figures.

Talk that T-Mobile might be bought by , with an anonymously sourced Wall Street Journal article published March 8 saying that the two companies had been exploring the possibility of a merger.

T-Mobile does not offer the popular iPhone, which is offered by wireless market leaders AT&T and Verizon Wireless, and has focused instead on smartphones running on Google's Android platform.

Along with an 8 percent ownership stake in AT&T, Deutsche Telekom would also receive in the deal a representative on AT&T's board of directors and the ability to reduce some of its debt.

Deutsche Telekom reported that the transaction will allow it to reduce its debt by 13 billion euros, or 31 percent, and concentrate on its European network.

"We have achieved the best solution for our company, our customers and shareholders," said René Obermann, CEO Deutsche Telekom, in a prepared statement on Sunday. "This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data."

AT&T said that the acquisition would help the company to develop its 4G LTE network.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future," Randall Stephenson, AT&T Chairman and CEO, said in a prepared statement. "It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people."

T-Mobile said that there will be no change to its service to customers while the deal is being reviewed over the next year.

"Until this deal is closed, we remain an independent competitor to AT&T. There is no change in service for our customers, and we remain committed to ensuring that our customers have the best experience possible using T-Mobile USA products and services," the company said in a prepared statement.

Several Bellevue Patch readers reacted to of the acquisition with dismay.

Reader Jan Stout was happy about switching to T-Mobile after being dissatisfied with AT&T's service, and praised T-Mobile's customer service.

"Once again, a huge corporation has taken over a smaller company that valued their customers," Stout wrote. "Customers lose every time this happens!"