AT&T’s merger with T-Mobile has lit up the blogosphere and tech commentators with some voicing concerns over competition, but others noting the big benefit of spreading 4G services to millions more Americans. On balance, I think this transaction will be positive for consumers. This merger will leave three large national players and several significant facilities-based regional carriers in the wireless market–more than can be said of many tech industries, including desktop operating systems, search, office applications, or mobile operating systems. There are also more than 180 regional wireless providers that serve rural, urban, and suburban areas across the country. These competitors leave many options for the average consumer, which keep prices down and help to drive innovation in the market. Just last July, the Government Accountability Office released a report which said that consumers benefit from significantly lower rates, by more than 50%, than they did in 1999. We will all want to keep our eye on prices, of course, but I expect the downtrend to continue.
Seth Cooper at the Free State Foundation, in referencing both the GAO report referenced above, and the FCC’s recent Wireless Competition Report, said that both reports recount positive trends in wireless innovation and competition, resulting in a wider variety of consumer choice and decreasing prices.
Also, someone needs to explain how exactly a large company like Sprint, which has vast resources and 50 million subscribers, is a loser in this deal. Sprint is still a major player, and has the resources to compete with AT&T and Verizon. In fact, if the furor on the tech blogs is any indication, Sprint has just gained thousands of disgruntled bloggers as customers. But more seriously, Sprint is now poised to be the alternative carrier that many saw in T-Mobile, and can use this opportunity to increase its market share.
The real winner in this merger is the consumer. When I first heard about the merger on Twitter yesterday afternoon, my first reaction was that 4G service was going to be even better and that more people would be able to enjoy it. With the increased spectrum and coverage made possible, both AT&T’s and T-Mobile’s customers should have a more robust wireless experience.
T-Mobile customers especially stand to benefit. Deutsche Telekom, T-Mobile’s current owner, wasn’t investing in 4G LTE. The company was toying with different ideas, but had no clear path to providing customers with 4G. Without that investment, it’s debatable whether T-Mobile had a chance to compete with AT&T or Verizon, and might not have been a viable company into the future. With the commitment from AT&T to invest in 4G, T-Mobile customers will now reap the benefits of a faster and much larger network.
Bottom line: Increased quality and better service means the consumer wins.
Zack Christenson is a Chicago-based digital strategist who writes on tech policy.