T-Mobile Stores Could Be Casualties Of AT&T Merger
While the AT&T-T-Mobile merger has yet to be approved by federal regulators, some people are already starting to feel reverberations from the deal.
According to the Wall Street Journal, some T-Mobile dealers are cutting down on plans for expansion or selling their stores, leaving T-Mobile to grapple with even more difficulties as its subscribers drain away.
T-Mobile and AT&T have 9,200 stores in the U.S. combined. T-Mobile has 2,000 company-run stores and 1,100 branded stores. While it hasn't been announced how many stores would be cut if the deal goes through, it is expected that stores will consolidate, especially when stores are located near each other. According to analysis conducted for the WSJ by real-estate research firm CoStar Group, 41 percent of AT&T's stores have at least a single T-Mobile store within a mile.
Some dealers have decided against opening new stores in light of the merger, especially since they cannot talk with AT&T about such matters while the deal is still being discussed by the government. T-Mobile has said that it will add 200 independent stores by the end of the year, and that it will sign on the leases for these new stores to help promote expansion.
However, AT&T has said before that one way the merger would help cut costs would be through an efficient reorganization of retail stores, according to the Journal.
And, the WSJ cautions, if a wave of T-Mobile stores close, landlords still dealing with empty stores on the heels of bankruptcy filings by major retailers like Borders and Circuit City will have an even worse situation on their hands.
In May, T-Mobile posted record subscriber losses. According to the AP, the carrier "lost a net 471,000 subscribers on contract-based plans. It was able to add subscribers through wholesalers, who pay much less than contract-signing customers, but it still lost 99,000 overall."