Unless you’ve been too caught up in your world, you have probably heard of the proposed merger between AT&T & T-Mobile USA, the U.S.-based subsidiary of Deutsche Telekom AG, back in March. AT&T would acquire T-Mobile for $39 billion and we would be left with 3 major carriers with Sprint being a very distant 3rd place. There have been arguments from both sides of the fence but speaking from a consumer’s perspective, if the merger goes through would be detrimental for us, the consumers!
Ok ok…What’s the news already? The U.S. Justice Department has filed a complaint to block this proposed merger. The hammer is coming down! If you understand the mobile wireless market, you can understand that this merger would reduce competition and increase the cost to the consumers. NOT GOOD! Verizon and AT&T, 1st & 2nd respectively on the U.S. market, already have the most costly plans so there would be less incentive for them to compete with the more economical options like T-Mobile itself and Sprint.
Ann guess what? If the merger doesn’t go through AT&T will pay Deutsche Telekom AG $3 billion, cede some wireless spectrum and cut the cost of using their networks. Take that, take that!!
Just another tidbit for you guys. Some of you might be aware that AT&T was originally broken up in the Bell System divestiture on January 1, 1984 in an antitrust lawsuit by the U.S. Department of Justice.
AT&T was split into 7 “Baby Bells“:
- Ameritech — (acquired by SBC in 1999, now part of the AT&T Inc.)
- Bell Atlantic — (acquired GTE in 2000 and changed its name to Verizon)
- BellSouth — (acquired by AT&T Inc. in 2006)
- NYNEX — (acquired by Bell Atlantic in 1996, now part of Verizon)
- Pacific Telesis — (acquired by SBC in 1997, now part of the AT&T Inc.)
- Southwestern Bell — (changed its name to SBC in 1995; acquired AT&T Corp. in 2005 and changed its name to AT&T Inc.)
- U S West — (acquired by Qwest in 2000; acquired by CenturyLink in 2011)