AT&T + T-Mobile = Bad Customer Service?

AT&T's (T) proposed $39 billion acquisition of T-Mobile USA will merge the wireless network rated among the worst in customer satisfaction with one rated among the the best. The result is not likely to be good for consumers.

According to a J.D. Power & Associates survey released in February, T-Mobile, now part of Deutsche Telekom (DTEGY), ranked first in Wireless Customer Care Performance for the second year in a row. AT&T, on the other hand, finished dead last.

A Consumer Reports survey released in December also ranked AT&T dead last among U.S. wireless carriers. T-Mobile, finished nine points ahead of AT&T, though it was behind US Cellular, Sprint-Nextel (S) and Verizon Wireless (VZ).

T-Mobile tied for the lead with Verizon Wireless in the American Customer Satisfaction Index survey released last May. Its score of 73 beat AT&T's 69. The survey did note that AT&T's score had improved 3%, indicating that it was making strides in addressing customers' concerns about its service, particularly among iPhone users.

Cobbled Together Through a Series of Acquisitions

One of the reasons why AT&T's service is below average is that the company has cobbled together its wireless business through a series of huge acquisitions in less than a decade.

In 2004 Cingular Wireless, a joint venture of SBC Communications and Bell South, acquired AT&T Wireless for $41 billion, creating the nation's largest wireless company. In 2005, SBC Communications acquired the original AT&T for $17 billion, and subsequently took the AT&T name. It swallowed Bell South for $67 billion in 2006, gaining control over the Cingular Wireless joint venture, and the Cingular name was dropped for the AT&T brand the following year.

These past mergers have not always gone smoothly for consumers and there is no reason to expect the T-Mobile deal will be any different, experts say.

Expect 'Sand in the Gears'

"You are going to have sand in the gears in the merger process," says Jeff Kagan, an independent telecommunications analyst, who adds that he routinely receives "lots of calls and lots of emails" from angry AT&T customers. "The problem is that they are not focused on the customer. They are not focused on the employee.They are focused on the investor."

Parul P. Desai, policy counsel for Consumers Union, publisher of Consumer Reports, argues that little good that can come from the merger since AT&T customers "routinely complain about hidden charges and other anti-consumer practices."

AT&T, for its part, has argued that the merger will be good for consumers by giving them access to more services. CEO Randall Stephenson (pictured) has been quoted as saying that network quality will improve. These arguments don't appear to be gaining any traction -- and a Justice Department antitrust investigation is likely.

Indeed, the media coverage of the deal has been largely negative. Blogger Om Malik is among those who argued that consumers will wind up as losers in the deal because it will leave only three national players -- AT&T, Verizon and Sprint-Nextel -- and result in higher prices.

Putting a Hard-Earned Reputation to the Test

That point was echoed Tuesday by the New York Times, which pointed out that T-Mobile "has long built its reputation by offering affordable, low-rate cell phone plans, including ones that do not require annual contracts or a minimum voice plan." The U.S. wireless arm of Deutsche Telekom, which acquired T-Mobile, then called VoiceStream Wireless, for $50.7 billion in 2001, worked hard to bolster its reputation for customer service.

"They decided early on that was where they were going to plant a stake in the ground," says Kirk Parsons, senior director of wireless services at J.D. Power and Associates, in an interview.

That hard-earned reputation will be put to the test if the merger proceeds. In order to realize the $3 billion in savings the companies hope to achieve, duplicate functions such as call centers will likely be eliminated. Customer satisfaction ratings tend to go down for companies that are acquired and may take several months to rebound, according to Parsons.

One plus for the merger is that AT&T and T-Mobile use the same underlying CDMA GSM technology on their networks, which may make combining them easier. How much of a difference it will make, however, remains to be seen.

"AT&T Mobility has had some problems over the last several years with overwhelming demand for wireless data from customers," writes Kagan in a statement on his website. "T-Mobile is the same technology in the network, but is not upgraded to the same extent as AT&T Mobility. There will have to be quite a bit of money and time spent on upgrading the network, but when that is done I think it will improve the experience to AT&T Mobility customers."

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dfmahdy

T mobile should be names worst customer service in the world. They hide +$600 hidden cost in my contract and sold me ugly phones with the market price along with a family plan. Cannot get more dissatisfied. No one helps from their customer service or either regional manager They says SORRY. What an emotional response from a profit making company???? The economy is bad cause of such SORRY as a response to corruption and abuse.

October 11 2011 at 1:48 PM Report abuse rate up rate down Reply
Becky Hughes

I received a text yesterday morning stating my T-Mobile service had been suspended. What? Did I forget to pay them this month? So I quickly log into my online account to see what's going on, and almost choked on my coffee. The current balance due read: $7,334.75. Trying to prevent myself from hyperventilating, I called up T-Mobile thinking clearly, this had to be some kind of billing error. My normal monthly bill is $190 and this appeared to be someone else's bill. My husband stepped in and started talking with customer "service". After spending countless minutes going around in circles with someone hardly understandable with ESL he managed to find out the charges were for international calls placed to the UK on an account we have for his 16 yr old brother. To be precise, over a 1 month of numerous phone calls to the UK in large time blocks for a month straight. My husband went to his brother's school and apparently his brother wasn't "aware" that it wasn't included in our calling plan. I won't go into the sheer stupidity of that, but I do think the public should know that whether they know it or not, they likely have an international calling plan on their account (I never knew nor ever signed up for international calling AND I restricted his line to not be able to add any services, downloands, apps, ring tones, etc.) And if perhaps they have a foolish teenager on their account, restricting phone minutes, downloads and adult websites may not be the only thing they need to restrict unless they'd like to receive a $7334.75 phone bill and their service cut off.
After speaking with 2 different managers, T-Mobile refused to remove any charges and offered to "set up a payment plan" requiring an immediate $1800 to re-instate our service. After I was done laughing, I informed this manager that they can either remove the charges and cancel that phone line & continue to receive my $190 every month or we will take our business elsewhere and they won't get anything from us. They refused. I started my service with Sprint today...and the 16 yr old won't see a cell phone until he can pay for one himself. But I will say, T-Mobile lost a loyal customer and I have NEVER been so disappointed in a company that texts me when I add a $1.99 caller tune to my account but won't advise me when a minor's restricted phone line incurs $7,334.75 in a month.
Cell phone companies need to be STOPPED from doing this to customers! They should be REQUIRED to immediately notify us when there is suspicious activity on the account and not a month after the fees are incurred. If we make a suspicious charge on our Visa at Best Buy our credit card co may deny the charge until they speak with us if we don't regularly purchase a $4000 TV. So why should cell phone companies not be required to prevent odd account activity to proceed for a month? Because they don't have to and since we're in contract we're stuck with either letting our our credit be affected with a huge collection or pay up the wazoo.

April 29 2011 at 11:19 PM Report abuse rate up rate down Reply
TGATP

Have no idea who the h voted T-Mobile best for customer service as they are about the worst! it took a total of FIVE HOURS just to get a SIM Card sent and a phone activated! Kept being sent to foreigners who obviously didn't understand English and asked the same question over 10 times. Then called corporate and was put on hold for another twenty minutes by a PR girl who sounded confused and very young! Just awful! I can't imagine it getting any worse!

April 29 2011 at 5:07 PM Report abuse rate up rate down Reply
Coke Kid

i dont like the merge and i am now looking to drop my Tmobile account because this to me shows i will have less competition at my fingertips with this merge so with that said i just see GREED and i dont see this helping people but filling the pockets of the company ceos so that said im dont with both of you...As far as my home At&t home digetal line and my u verse im going to change to comcast so good bye At&t youe both blew it!

March 24 2011 at 12:02 PM Report abuse +1 rate up rate down Reply
ehm1217

Merging the best with the worst indeed. As a 10+ year very satisfied T-mobile subscriber this is very depressing news. Good news is my contract will be up before this merger completes. Bad news is there's not much left out there for consumers to choose from.

March 23 2011 at 4:49 PM Report abuse +1 rate up rate down Reply
mack or mary

I think it is a bad deal! when at&t bought southwestern bell my phone rates almost double and with no notification . i was shocked !

March 23 2011 at 4:32 PM Report abuse +1 rate up rate down Reply
tennispatron

The doinks att ( small letters for small minded crooks) will lose on this deal.
One day our country will begin to block mega deals that stymie competition like this one.

att is the worst of the worst in customer service...just like the article says.

March 23 2011 at 3:41 PM Report abuse rate up rate down Reply
Greg

Funny, I've been with AT&T for several years, for cell, landline and internet, NEVER EVER had any problems at all. No dropped calls, no billing problems, no phone problems-nothing. I think AT&T gets a bad rep b/c of how big it is, kind of like everybody bashing Walmart but everybody shops there at some time or another. I know many people who have switched from other carriers to AT&T and widh they would have switched sooner. Maybe it's a regional thing.

March 23 2011 at 3:22 PM Report abuse -2 rate up rate down Reply
1 reply to Greg's comment
Dustin Snyder

LOL WOW GREG READ A BOOK...



http://winningargument.blogspot.com/2004/06/wal-mart-is-bad-for-america.html

April 23 2013 at 10:25 PM Report abuse rate up rate down Reply
fonzy49315

PEOPLE BEWARE, BOTH THESE COMPANYS ARE A RIP OFF AND JOKE. HOPE YOU DONT LEARN THE HARD WAY LIKE WE DID, SIGNED ON FOR A 12 MONTH SPECIAL OF AT-T UVERSE, 9 MONTHS INTO IT PROGRAMS STARTED DROPPING OFF AND THE BILL WENT UP IF WE WANTED TO KEEP THEM. WHEN WE CALLED AND COMPLAINED WE WERE TOLD THATS THE WAY IT IS AND WOULDNT DO ANYTHING ABOUT IT, NEEDLESS TO SAY WE ARE NO LONGER WITH THEM AND NEVER WILL BE AGAIN. T- MOBILE SOLD US A PHONE SERVICE AND ASSURED US WE WOULD HAVE NO PROBLEMS WITHIN THE AREA INVOLVED, GUESS WHAT, COULDNT EVEN GET A GOOD CONNECTION WITHIN THE 20 MILE RADIUS INVOLVED BUT THEY SURE WANTED TO BE PAID FOR THE SERVICE THE KNEW THEY COULDNT PROVIDE.AND NOW THESE TWO COMPANYS ARE GOING TO MERGE, THINK TWICE PEOPLE BEFORE GETTING INVOLVED THEM.

March 23 2011 at 3:02 PM Report abuse +1 rate up rate down Reply
dawnrdm

If At&T think they will be getting an additional 34 million subscribers they are very mistaken. Read any T-Mobile comment board and an overwhelming number will leave as soon as the merger goes through. T-Mobile has very reasonable rates and that is who their customer base is. They will not stay with a company that raises their rates for less service.

March 23 2011 at 2:50 PM Report abuse +1 rate up rate down Reply