Thursday, March 24, 2011

AT&T to purchase T-Mobile; corporations: 1 consumers: 0

With the recently announced purchase of T-Mobile USA by AT&T, it's evident that the only winners are going to be AT&T and T-Mobile themselves.

There's nothing good in this for the consumers. T-Mobile is the cheapest out of the four major nationwide carriers in the US. They're definitely cheaper than AT&T. With them gone, US customers will be forced to pay higher rates. AT&T claims that by acquiring T-Mobile they can lower their costs, and supposedly (1) they're going to pass on some of that savings with the customers. Sure they will. When's the last time you heard of a major corporation lowering prices, unless it was forced to by competition? If they can get away with making more money, they're going to do everything in their power to do just that.

And that brings me to my next point: competition. With T-Mobile out of the picture, there's less competition. Somehow or another AT&T is actually claiming there's plenty of competition! (2) What a joke. It doesn't take a PhD in economics to realize that less corporations in a given market = less competition = higher prices.

To top it off, T-Mobile is one of the few US carriers (along with AT&T) using a GSM-based network. Most people probably don't care, but for those who travel and want to use their phone outside the country, the options are already limited, and will be even worse after the merger. So if you want a GSM carrier, guess who that leaves? AT&T. Not only will you have to put up with higher prices, but you'll have to put up with their silliness, like blocking non-Android market apps on Android phones.

Ultimately the consumers are the losers in this deal.

1 "AT&T has promised to spread some of that windfall around"

2 "'The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal'"


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