In the proposed merger between AT&T and T-Mobile, it certainly raises the ugly specter of highly concentrated control, fewer consumer choices and higher prices. While various labor groups and legislators have endorsed the deal, it could be a garbled signal for most U.S. cellphone users.
AT&T’s many faults are certainly on the tongues of consumer advocates, who fear that cellphone services would be limited after the merger. AT&T would have even more control over prices and the kinds of phones/service available.
Now holding 27 percent market share, AT&T would gain a 44-percent foothold if the T-Mobile merger is approved by the Federal Trade Commission Federal Communications Commission.
At present, only four companies control 90 percent of the U.S. cellphone market. With a takeover of T-Mobile, AT&T would face off against Verizon and Sprint for dominance, perhaps even triggering a further consolidation of the remaining two smaller players. Would this be good for cell and broadband users?
There’s no guarantee that economies of scale would trickle down to consumers. After all, T-Mobile’s aggressive pricing forced AT&T to offer better plans. Without a strong competitor, prices rarely drop, although that’s not how AT&T is pitching the deal.