Five Reasons Wireless Subscribers Will Suffer Under AT&T/T-Mobile Deal
In spring, a young man's heart turns to love. But I've seen young men, and Ma Bell ain't no young man. And this has nothing to do with love.
One day before spring was sprung, AT&T on Sunday announced it's shelling out $39 billion for its acquisition of T-Mobile USA from Deutsche Telekom. No doubt it's a pleasant surprise and major win for AT&T and its investors, if approved.
But this deal stinks to high heaven for wireless subscribers of any network.
The combined AT&T and T-Mobile will be the biggest carrier in the US, and with only one major competitor left. This is something the Department of Justice and the Federal Communications Commission (FCC) should smack down ASAP. AT&T and T-Mobile America are the No. 2 and No. 4 players respectively. This deal will make AT&T No. 1.
But before the DOJ and FCC investigate, let’s talk about the bleak realities wireless subscribers will face as a result of this dangerous deal.
It's a situation that leaves Verizon as the only other major player. If the government regulators allow this, Verizon will probably buy up Sprint. Where does the madness stop?
What will life be like for a wireless subscriber on any network when AT&T is the No. 1 U.S. wireless network?
IMO, it’ll suck. And that's putting it politely. I predict five awful outcomes.
1. The Ma Bell monster is back. Nuff said.
2. Less competition. A market controlled essentially by AT&T and Verizon (with Sprint in a distant third place) guarantees higher prices for everyone. AT&T will be setting the rules. Subscribers' wallets will suffer, no matter who their service belongs to.
3. Way less innovation. Everyone knows T-Mobile was pushing the industry forward with its often ground-breaking tech, affordable plans and absolutely tremendous customer service. Ma Bell will stop that annoyance in its tracks and drive the market at its own slow pace.
Consider. T-Mobile and others have traditionally forced the market to match innovation, pricing and services. T-Mobile USA came out with the first Android phone, remember. It took a risk there. Sayonara to such customer-friendly risk-taking under this new arrangement.
Ma Bell will flex her beefy, hairy biceps and do what she can for her shareholders. (Of course, that’s her fiduciary responsibility.) But what’s good for shareholders is going to be misery for wireless subscribers across the board.
With T-Mobile in its maw, AT&T will see no reason to keep up the level of innovation in tech and excellent support T-Mobile now provides. They'd rather save the money.
4. Wireless users likely won't get access to T-Mobile affordable rates or such services as its Even More Plus plan once AT&T swallows it whole. (And in case you're wondering, T-Mobile is already saying it won't play on the iPhone. No surprise there.)
5. If this unfortunate acquisition happens, Ma Bell will be holding almost all the marbles. It will likely dumb down T-Mobile innovations and cut corners by shorting T-Mobile's great service for money's sake. It'll combine inventory, too. That means fewer phones to choose from -- carriers control the shelves, not phone makers --amounting to a rotten deal for subscribers the nation over.
This is bad news for everyone but involved shareholders, and even they'll be suffering from higher rates and worse service on their own phones. Call it karma.
I implore the DOJ and FCC to kill this idea for the benefit of the Americans they serve, citizens who are wireless phone subscribers in a giant market. Even if they are investors in Ma Bell.
It oughta be illegal. I hope it is. I don't like it one bit. It smells like Ma Bell smelled when they took her out to pasture back in 1984. Rank and stale.
And the result as I see it for wireless subscribers, if this completes as planned next year, reminds me of an old, depressing Allman Brothers song. The refrain "tied to the whipping post" is now stuck in my mind.
Let me know what you think.
Drop me a line. I'll be following this on BYTE Mobile Radio on our regular show later this week. For InformationWeek, TechWeb and the upcoming www.BYTE.com, I’m Gina Smith.
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