Last week, the U.S Department of Justice blocked AT&T’s $39 billion acquisition of T-Mobile. If these companies were to successfully merge, they would create a wireless network superpower capable of exponentially reducing competition in the field of mobile carriers. The Department’s deputy attorney, James M. Cole, addressed national concerns about the merger, saying that it would cause “tens of millions of consumers all across the U.S [to face] higher prices, fewer choices and lower quality products for their mobile services.” The intervention surprised AT&T executives, prompting a disappointed response from Vice President, Wayne Watts.
On September 6th, Sprint Nextel filed a similar lawsuit blocking the merger, creating yet another legal hurdle AT&T would have to overcome. If this merger were to pass, it would almost certainly put companies like Sprint, MetroPCS, Boost, and other smaller networks out of business. Therefore, Sprint’s interference isn’t a surprising move in the least.
Chitika Insights analyzed a week’s worth of impressions to determine the market share breakdown by mobile networks. Using the data, we were able to project what the market would look like if AT&T and T-Mobile were to merge.
As you can see, AT&T/T-Mobile would own over half of the market. Together, they’d have over 130 million subscribers. Verizon would still have a secure following with 33% of the market. This projection shows the immediate impact of the merger, so the smaller network’s share looks unscathed. However, the future consequences are dire for the smaller networks because the AT&T/T-Mobile network would be able to dictate market prices. Perhaps, more worrying for the likes of Sprint and MetroPCS is that their subscribers will be tempted away by the greater combined coverage of the proposed behemoth.
Insights wants to know what our readers think about the proposed merger. Do you think the government’s involvement is justified? Do you think this move will be good or bad for the mobile industry? Do you think there’s still a chance that this merger could pass at all? Let us know by commenting, or emailing the contributors directly.
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