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Will AT&T Acquire a Lemon?

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That sound you hear is the collective rumble of thousands of nervous fingers tapping at Deutsche Telekom in the hopes that the AT&T's acquisition of T-Mobile goes through.

During its first quarter earnings report, T-Mobile announced it had lost 471,000 customers who either allowed their contracts to lapse or canceled outright. Gaining only 372,000 customers over the same period of time, that's a loss of 99,000 customers -- or a 29% increase in losses compared to 2010's first quarter.

But this appears to be par for the course. As CNet's Don Reisinger notes, T-Mobile has seen its subscriber numbers increase only once in the last five quarters.

Although its revenue of $4.63 billion was on par with the same time last year, profit dropped over $200 million year over year -- falling to $135 million.

The company admitted that -- despite upgrades in network speeds and a huge marketing push -- "competitive pressures" caused the free fall in subscriber numbers and profits. Indeed, AT&T and Verizon are each putting up a fight with the iPhone 4 and numerous Android devices, and Sprint is holding its own with inexpensive contracts and a solid line of devices.

And it's that increased competition that AT&T can parlay into justification for the acquisition and, in turn, an FCC approval.

But at $39 billion, maybe the deal doesn't look so rosy now.

(See also: AT&T, T-Mobile Merger Could Be Disastrous for Subscribers and FCC Placates Us Before It Approves AT&T, T-Mobile Merger)
POSITION:  No positions in stocks mentioned.