Why AT&T-Mobile is not a good idea

AT&T announced today that they are acquiring T-Mobile for $39B cash/stock. If cleared by regulatory committees, this merger will make AT&T the largest US wireless carrier. We’ll also effectively be down to three major carriers: AT&T, Verizon, and Sprint (although each of them will argue that there’s a plethora of offerings at the local level, the smaller networks don’t actually own and manage their own infrastructure but rather rent airwaves from the big ‘uns).

It’s an even less crowded playing field if we consider the underlying network technology. AT&T & T-Mobile both have GSM networks, and hence the purchase makes sense as they’ll be able to extend each other’s infrastructure well. Verizon and Sprint both support CDMA. If you don’t much care one way or another, you have 3 options. If you want a CDMA phone, you have 2 options. If you want a GSM phone and this deal goes through you’ll have just 1 option. GSM is used in most of the rest of the world for mobile telephony and many countries outside the US that support CDMA use it for VoIP, regular telephony, or data only service (not mobile phones).

Less options at carrier level spells less options throughout: I fully expect carrier-supported handheld selection to become even more dismal than previously, and consumers will have less real choice when it comes to voice/text/data plans and their price per month.  Most importantly, the impetus to innovate with reduced competition is not as strong and the potential long term effect is worse service for all.

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