In a blow to T-Mobile, some dealers may be looking to abandon the brand instead of waiting to see what happens when and if the merger with AT&T goes through.

Even though AT&T?s $39 billion acquisition of T-Mobile is not expected to go through for a year, some T-Mobile dealers are considering their future and looking to scale back expansion plans or exit the industry, according to a report in the Wall Street Journal. While some redundancies are to be expected from a deal of this scope, dealers may be deciding to act now because of continued weakness in the retail landscape.

?Whenever there is a takeover and there are redundancies, somebody usually takes a walk,? said Neil Strother, Kirkland, WA-based practice director at ABI Research.

?If I was running a retail business and could see the writing on the wall, I might decide to get out early if I were planning to get out anyway because the retail environment is so tough right now,? he said.

Retail overlap
AT&T?s deal for T-Mobile faces scrutiny from regulators and the companies have said completing it may take a year. 

Regulators are concerned that the deal would decrease competition in the space and drive up prices. The FCC last year said concentration is rising among mobile phone operators.

The deal would make AT&T the largest U.S. mobile carrier pushing it past Verizon Wireless.

At issue for dealers is the fact that retail stores for T-Mobile and AT&T may be close to one another in some markets.

AT&T has said it expects the deal to bring synergies to the retail business but has not indicated how this will affect dealers.

If dealers were to start closing doors on T-Mobile outlets soon ? with completion of the deal still a year off ? this could impact T-Mobile?s bottom line.

?T-Mobile still has to compete now and whenever the deal goes through,? Mr. Strother said. ?If there are fewer outlets, it means they can?t sell devices, plans and services as directly to the public as they could before.?

?Fewer touch points can affect your bottom line,? he said.

If this were to happen, it would come at a difficult time for the brand, which reported a net loss of 23,000 customer for the fourth quarter.

However, T-Mobile is not likely to be surprised by this development.

?When you are in between a deal, there are going to be paint points ? my guess is that they are not particularly surprised,? Mr. Strother said.

Final Take
Chantal Tode, Assoc. Editor, Mobile Marketer