Monday, May 9, 2011


If you have not heard by now then you might be surprised to know that AT&T plans to buy T-Mobile US for $39 billion dollars. I don't know how to feel about this one. When it comes to current T-Mobile customers they have two potential scenarios. On one hand T-Mobile customers will benefit from having a stronger network backbone, which should lead to less dropped calls, and missed messages. However this will also result in an increased cost of current customers mobile plans, and increased traffic on AT&T's already suspect network. But aside from the effect that this will have on T-Mobile customers the US consumer market as a whole will be affected by this deal. Currently there are four major cellphone companies in the United States; I will list them in order of revenue: Verizon WirelessAT&TSprint, and T-Mobile. If AT&T were to succeed in buying T-Mobile then that would reduce the number of wireless companies to three. However the size of AT&T would become so large after the acquisition that only Verizon would be capable of competing with them. This means that eventually Sprint will cease to exist, or be bought up. Effectively creating a wireless duopoly in the United States.

Aside from millions of jobs that will be lost, the consumer will be greatly affected if the duopoly were to happen. Firstly the cost of wireless plans will increase greatly. Currently AT&T and Verizon are the most expensive wireless companies, however they have to maintain a reasonable price because if they did not all of their customers would defer to either Sprint or T-Mobile. However in the case of such a duopoly those two companies will be able to dictate the price of wireless plans as they see fit. Secondly the consumer will suffer from a lack of choice, with 2 of the 4 major wireless companies gone choice will also be gone.

Lest we all forget something of this nature has happened once before. What is now know as AT&T used to be known as Ma Bell which served as a monopoly from 1877 to 1954, however a federal mandate broke the company up into several companies. Nobody wants monopolies and duopolies, they are not good for the country and they are not good for consumers.

In hindsight its seems nonsensical to have not known that this could occur. AT&T merged with BellSouth, and Cingular and seems bent on dominating the US wireless market, or at least returning to their former Ma Bell days.


  1. I heard that this comes because T-Mobile and Sprint were in the talks of merging, but then AT&T muscled in and bought out T-Mobile. And I wouldn't be surprised if one or the other gobbles up SPRINT either. Frankly I'm scared of where and how this dupoloy is going to affect our wallets.

  2. Yea that is definitely something to worry about. It's a shame that companies only think of how they can make more money immediately. But either way they have to defend there case in front of the FCC this week so hopefully it gets shot down.