AT&T giant telecom company is planing to carry out a deal to buy T-Mobile for $39 Billion Dollars. The purchase in confronted by strong opposition from other telecom companies because of fear that AT&T might use its advantage to crush competition.T-Mobile is currently one of the telecom companies who offer the lowest prices. This purchase will give AT&T an advantage over the control of the prices of the communication prices. The merge of this two giant companies will benefit the consumers because according to the Business Insider, “A 2010 report from the U.S. General Accounting Office (GAO) states the overall average price (adjusted for inflation) for wireless services declined 50 percent from 1999 to 2009, during a period which saw five major wireless mergers”. AT&T’s advantage with this merge will allow it to control and lower the prices, this will benefit the consumer since it will have to spend less money on communication services. AT&T and T-Mobile customers will see service improvements, including improved voice quality as a result of additional cell tower density and broader network infrastructure. This means that not only customers will be able to spend less in communication services but the will also get a more and better quality from the services.
-Santiago Z
-Santiago Z
I think Santi's assessment of AT%T's T-Mobile acquisition is spot on: encompassing both the merger's economic effects and overall impact on the consumer. One downside to this seemingly perfect plan is that the "new" AT&T now has a monopoly on all cellular GSM networks in the United States. AT&T and T-Mobile are the two major GSM carriers in America, and historically, T-Mobile has helped to lower AT&T's plan prices because of their competitive rates. Now that AT&T controls the two major GSM carriers, there is much less competition to help lower prices for consumers. Additionally, AT&T is now in total control of what GSM handsets hit American soil, thereby limiting the overall variation of GSM phones. Don't hear me wrong: I see the merger as a good thing and since AT&T has some of the lowest customer satisfaction rates in the U.S., this merger will hopefully improve both the cellular and customer service that we pay an arm and a leg for each month.
ReplyDeleteThis was a huge move for AT&T and will give an edgo out from T-Mobile who have always been competing with each other. Like the race to the 4g network and who has the iPhone and who has the nicest smart phones. One problem for people who buy AT&T products, it will make the prices increase since there isn;t such fierce competition anymore. AT&T see's this as one less person to fight with, although there is still other giants like verizion, AT&T can afford to be a little less afordable than before.
ReplyDeleteAT&T has made a really smart moving buy buying out this company. With Verizon now on the market with the iPhone, AT&T's competition has increased immensely. AT&T has had a background of dropped calls and dead zones, which they hope to fix soon with the use of the new T-Mobile towers they obtained. Now that T-Mobile is out of the picture, AT&T needs to make a move to attract all ex-T-Mobile customers to sign contracts with them instead of Verizon or Sprint. Whether it be lowering prices or guaranteeing better coverage, they need to do something or this whole buyout will just go to waste. This buyout is very ambiguous in the sense that it will decrease competition, but at the same time will provide room for more competition. It decreases competition by completely removing one company, but increases it by allowing other companies to take over T-Mobile's customers. This is one of the greatest buyouts in recent years.
ReplyDeleteI agree with you all, I think the prices are at AT&T’s mercy, and since they will now have a bigger control over the market the can decide whether to raise or lower prices. But since AT&T’s infrastructure will grow, now the will have more equipment to provide the services and therefore being able to lower prices and buy doing this more people will want to join their network.
ReplyDelete-Santiago Zapata