Monday, September 3, 2012

Occasionally, competition yields savings. At Least in the case of the failed AT&T - TMobile Merger

Sometimes a little competition is a good thing. From a leading blog on telecom: The biggest thing that has happened to improve the competitive landscape is that T-Mobile has now finally acquired enough spectrum to build out a nationwide 4G LTE network. Before the AT&T merger died off, T-Mobile didn’t have nearly enough spectrum to remain competitive with its rivals in the LTE space, which was a big reason why parent company Deutsche Telekom wanted to sell it to AT&T in the first place: if T-Mobile was doomed as a national carrier anyway, Deutsche figured it might as well get some money for the carrier while it still could. The Federal Trade Commission recognized the fact that a joining of AT&T and T-Mobile would reduce competition, ending up with a wireless leviathan of over 125 million customers -- more customers than Verizon, and three times as many as Sprint Nextel, and control about 42 percent of the U.S. mobile market. In theory, consolidation isn't itself may not be bad eventuality. But it is unusual that in such a market with such high barriers to entry, protected with the assistance of government and regulators, would get any more open. We don't need the current oligopoly, much less a duopoly.

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