Consumers Win Big in AT&T, T-Mobile Merger

Consumers Win Big in AT&T, T-Mobile Merger

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Just about a month ago in a deal between AT&T and Deutsche Telekom, AT&T acquired T-Mobile USA. Many worry the deal, which cost AT&T $39 billion in cash and stocks, will create an imbalance in the wireless industry resulting in a sort of monopoly.

But, as reported by Politic365’s own Alton Drew, the merger creates win-win scenarios for the consumers. And isn’t that what it should be about?

Between 1999 and 2009 there have been a number of wireless company mergers and those resulted in more efficient use of the networks.  That in turn resulted in a decline in service rates over that period.

When it comes to the AT&T/T-Mobile merger, consumers can expect a lot more than just a decline in rates.  The merger presents a real opportunity to accelerate deployment of high‐speed broadband, narrow the digital divide, and expand good union jobs in the wireless industry.

Together the two telecom entities expect to expand high speed wireless broadband to 95% of the country. Good news for the nearly 100 million Americans, many in rural communities or lower-incomes urban areas, that do not have broadband at home, and the estimated 24 million Americans that don’t have any access at all to broadband services.

The merger could also help improve U.S. ranking in broadband adoption.  Currently, the U.S. ranks 15th in the world in broadband adoption, and 25th in the world in average Internet connection speeds.

In this tumultuous economy, many worry that mergers usually mean layoffs and uncertain times for employees on both sides of the table. However, this merger will bring about greater employment security and a bargaining voice. Currently the Communications Workers of America (CWA) represent 42,000 AT&T wireless employees in addition to the 104,000 AT&T workers on the wireline side of the company.

In a brief from CWA president Larry Cohen about the merger, he states,

AT&T has maintained a policy of true neutrality regarding union representation which has enabled its employees to make their own choices. Other U.S. wireless companies, promote an atmosphere of fear to deny their workers’ organizational rights.

Rounding out the positive reasons the merger is good for consumers is that T-Mobile had no plans or any clear path to offer 4G (high speed) Internet wireless services to its 34 million subscribers. It simply did not have the spectrum or the capital to build a 4G network.  That would have left millions of subscribers stuck on 3G.

AT&T has made a commitment to provide 4G LTE service (which can deliver download speeds of 10 megabits per second) to 95% of the U.S. population (294 million people) within six years. This is an increase of 46.5 million beyond current plans, and includes T-Mobile’s 34 million customers who were not slated to obtain 4G at all.

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E.R. Barnette
Prior to joining Politic365, E.R. Barnette spent nine years with Procter & Gamble. Barnette has a rich, diverse background in sales analytics as well as merchandising & marketing of Fortune 500 brands. Barnette has a Bachelor of Arts from the University of North Carolina - Chapel Hill in Communications/Media Production. The ideas and opinions expressed in this article are solely those of the author, and have complete editorial independence from any Politic365 partners, sponsors, or advertisers. For additional information about Politic365, please visit http://politic365.com/about/.

2 COMMENTS

  1. This article is one of the most shameless pieces of propaganda I've read on this site.

    It's not difficult to see this merger does very little, if anything, for consumers. First, there's the resulting narrowing of choices in hardware, software, and services available to consumers that comes standard with any merger in national wireless carriers. Second, consumer prices will increase as a direct result of the reduced competition between mobile network operators. Third, there will be an attendant loss of jobs as the new entity sheds overlapping positions.

  2. Good analysis — I agree that this merger could potentially factor into closing the digital divide once and for all. Hope it truly pays off for unconnected minorities that need broadband — in one form or another — in their lives.

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