Monday, September 19, 2011

[Guest post]: AT&T and T-Mobile Merger – Good or Bad?

By Laura Backes*, DSL Service Providers

No one really saw it coming… it was supposed to go off without a hitch. However the merger between AT&T and T-Mobile hit a huge snag when the Department of Justice turned around and filed suit proclaiming that the merger would dramatically lessen the competition in the mobile industry. But what does it mean, really, for what is arguably the most important factor in this whole acquisition – the consumer - if the two companies are permitted to unite? As with everything major like this, there are a lot of hot-headed opinions floating around supporting both side of the merger, making valid points in favor of and against the subscriber.


1.      Expanded coverage for AT&T users: AT&T is notorious for dropped calls, to an annoying degree. The merger with T-Mobile would expand coverage and provide a more solid foundation so that this would be less of an issue
2.      Increased and faster service: Both AT&T and T-Mobile users would like see an improvement in service. Considering AT&T is too bogged down right now to accumulate their users and a merge with T-Mobile would give them some breathing room. As for T-Mobile users, the union with AT&T should alleviate the in-home service issue and decrease roaming issues
3.      Rollover Minutes: At the moment, T-Mobile users suffer from the “use it or lose it” plan, meaning that if they don’t use up their monthly minutes they are unable to utilize them the next month. AT&T, on the other hand, allows you minutes to roll over for 12 months. The merger will allow for the elimination of wasting unused minutes, which is a definite benefit for T-Mobile users.
1.      Fewer Choices: With T-Mobile being absorbed by AT&T, consumer’s choices will end up being limited. Thus far, T-Mobile has been on the up and up with innovation and experimentation in the marketplace. But a merger with AT&T will likely limit this
2.      Job Reduction: With any big merger there will always be a need to “trim the fat” so to speak. Because two companies will downsize (or upgrade, however you want to look at it) into one, there will be an inevitable overlap of jobs, meaning that someone’s gotta go!

3.      Price increases: AT&T is more expensive than T-Mobile, plain and simple. It’s unlikely that prices will go down after the two companies blend together… and for T-Mobile subscribers this means a price increase.
So will the consumers be better off or worse off if the merger manages to push through? Right now, it looks as though AT&T customers will come out the breadwinners and T-Mobile customers will be the ones to suffer. For now, all we can do is wait to see how the suit plays out and hope that everyone will benefit from the outcome.


*Laura Backes has been writing for DSL Service Providers since April of 2010 and has really enjoyed getting to know more about Internet service providers and the various roles that ISP’s play in the lives of the average person.

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