AT&T will own 78 percent of the U.S. wireless revenue market after merging with T-Mobile
AT&T, the telecommunications company trying to buy T-Mobile for a whooping $39 billion, is trying to assure the Federal Communications Commission (FCC) and the US Department of Justice that the merger will promise to bring back about 5,000 call center jobs to the United States. Aside from this, both companies are also pledging that the merger will not result in any job losses for those already employed in call centers in the US.
This announcement comes as a way to upswing the anti-trust moves by the FCC and Justice Department, where the latter just recently filed the anti-trust lawsuit (on Wednesday) against the merger while the FCC is still in the process of its own review. According to a CNNMoney report, AT&T’s 98 million customers will merge with T-Mobile’s 34 million users, creating a large customer base of 130 million subscribers or about 78 percent of the US wireless industry’s revenue. T-Mobile USA is owned by Deutsche Telekom AG of Germany.
The merger has been gaining negative grounds from a lot of consumer groups and businesses, including competing phone company Sprint, the third largest wireless carrier, where everyone is saying it wants to “avoid another Ma Bell monopoly” and allow the industry to continue being competitive with each other 25 years after behemoth Bell was broken up on anti-trust grounds. AT&T currently holds the number two spot in wireless carriers while T-Mobile is fourth in ranking. Shares of AT&T went down more than 4 percent after the Justice Department’s lawsuit.
NPR reports through an independent analyst of the telecom industry that the merger will result “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services.” The article says that this deal only benefits AT&T.
Though there are advantages to the merger like increased network coverage and improved performance for AT&T customers, the merger will also “increase market concentration, reduce consumer choice, and open the door for price increases in the most heavily populated U.S. wireless markets.” The news organization cites some examples, like Miami where AT&T has 39 percent of market share; after the merger, that will increase to 53 percent. Or Dallas, from 40 percent to 54 percent; and San Francisco, from 44 percent to 52 percent.
Sources: Yahoo News | Click2Houston.com | Huffington Post | NPR
Photo by espd at Flickr.com
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