SmartMoney Blogs

Pay Dirt
A daily look at what we buy, how we spend, and the companies that do right - and wrong - by their customers.

AT&T, T-Mobile Merger Signals Higher Prices

Whatever way AT&T Inc. spins it, the mobile giant’s plans to merge with T-Mobile USA in a deal worth $39 billion may be a win-win for shareholders if it goes through, but it will likely be a lose-lose for consumers. It will almost certainly result in less choice of mobile packages for customers and – given a respectable amount of time – higher prices too.

Getty Images

Naturally, AT&T’s statement says consumers will still enjoy a range of choice: “The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market.”

Sounds good in theory, but it’s far from a level playing field. AT&T and Verizon – with over 65% collectively of industry sales, according to Bernstein Research – outsize Sprint Nextel Corp. and T-Mobile USA, the next biggest wireless carriers, and leave Clearwire Corp., Leap Communications and MetroPCS Communications Inc. in the dust.

AT&T also implies that more consolidation actually means lower prices. It’s a novel proposition. To support it, the company cites a 2010 report from the U.S. General Accounting Office, which said that the overall average price adjusted for inflation for wireless services fell by 50% from 1999 to 2009 during which time there were five wireless mergers. But that was a different world.

During those critical 10 years, cell phone use in the U.S. soared. AT&T and Verizon benefited from vast economies of scale. As companies merged, the cost per subscriber for companies fell as did roaming fees. Today’s wireless market is near saturation with 93% cell phone penetration, versus nearly 35% in 2000, according to CTIA-The Wireless Association.

The merged AT&T/T-Mobile entity would have 130 million users, giving the all-new AT&T and Verizon nearly 85% of the country’s cell phone market. A depressing aside for consumers from Bernstein Research senior analyst Craig Moffett: “The wireless industry is arguably already a duopoly in the United States…And it is growing more concentrated at a rapid pace.”

The upside: T-Mobile and AT&T offer each other complimentary technologies, which should produce a more powerful and reliable network, with improved voice quality and better coverage. T-Mobile, previously the wallflower at Apple’s party, will also eventually have access to the iPhone 4 … or possibly iPhone 5 if antitrust regulators allow the deal to go through.

It gives T-Mobile customers, fearful of rising prices, something to look forward to.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (2 of 2)

View all Comments »
    • By WebOsPublisher

      Download Image Converter Icons at Image Informer: Graphics Converter Pro,Pixillion Image Converter,Image Icon Converter.
      Converter Icons at Image Software Informer
      Image Converter Icons software
      ” /image convertericons
      Graphics Converter Pro 7.9
      Newera Software Technology Inc.
      open & convert images.
      Pixillion Image Converter unknown
      NCH Software
      Pixillion Image Converter is an image converter which supports a lot of formats.
      Image Icon Converter 5.1
      Image Icon Converter is a comprehensive tool for beginner icon designers.
      36-image converter 4.2
      UIC Phoenxsoftware
      36-image converter is a tool to convert almost any image to almost any image.
      More Image Converter Icons Programs:
      Image Converter Pro Deluxe
      Jared Ricks
      Image Converter enables you to convert from one image format to another.
      ABB Image Icon Converter 5.1
      ABB Systems
      ABB Image Icon Converter allows you to convert images to icon files (.ico).
      Clever Batch Image Converter 1.8
      Dumenko Michail AKA DoomM
      Clever Batch Image Converter allows you to convert images to multiple formats.
      Converter 3Plus 1.0
      Design Create Implement (DCI)LLC
      Converter 3Plus is an all-in-one straightforward image converter.
      IconConverter 2.0
      IconConveter 2.0 is a program to create an icon or cursor from an image.
      Image Converter .EXE unknown
      SoftTech InterCorp
      Image Converter .EXE is a fast and flexible image conversion program.
      PicViewer 11.0
      Anix Software
      This software provides you with the function of finding and viewing images.
      Email Image Converter 1.0
      Victor Onishchenko
      Email Image Converter is an Outlook add on that resizes image attachments.
      Digital Image To Icon Converter 3.0
      It converts images or digital photos to windows icons.
      Icon to Image Converter 1.3
      It allows you to convert all Windows XP icons, cursors and Icon Library into Windows BMP, GIF, JPG…
      Other Image Converter Icons Downloads:
      Right Click Image Converter 4.9
      Convert between image formats from the Windows shell. Supports JPG, BMP, PNG, GIF, ICON, and several…
      UMDGen (PSP Image Converter) 4.0
      Stardock Corporation
      Icon Converter Plus (Batch Icon to Image Converter) 4.6
      HTML to Image Converter Command Line 1.0
      HTML to Image Command Line can convert both MHTML and HTML webpages to images.
      ACA HTML to Image Converter 1.2
      ACA HTML to Image Converter is a windows HTML-to-image converter.
      Ivan Image Converter 2.5
      This software lets you convert and edit image files in many formats.
      AVS Image Converter 1.1
      Online Media Technologies Ltd.
      AVS Image Converter is an batch image converster and editor.
      Image To ASCII Image Converter Software 7.0
      Allows you to obtain ASCII code from any picture you want.
      Okdo PowerPoint to Image Converter 3.5
      Okdo Software, Inc.
      Okdo PowerPoint to Image Converter is a powerpoint to image converter.
      Okdo Website to Image Converter 3.6
      Okdo Software, Inc.
      Okdo Website to Image Converter is a powerful Website to image converter.
      OpooSoft PDF To Image Converter OpooSoft PDF To Image Converter 6.3
      OpooSoft PDF To Image Converter v6.3
      E-mail Address:
      Remember me
      Register now »
      Forgot password?
      Sign in with:
      Image 3d Transition Effect Algorithm
      Image Editor MFC
      Image File Format NRG
      Image Format EPS PDF Windows xp GIF JPG
      Image Hacking Binary Files Visualize
      Image Edit TGA
      Image Edit Text
      Image Edit Stretch
      Image Edit Speech Bubble
      Image Edit Slice OSX
      Image Edit Shapes Activex
      Image Edit SDK Foxpro
      Image Edit RED EYE Shareware
      Copyright © 2012, Informer Technologies, Inc.
      Terms $ Privacy|
      Feedback $ Support|
      For Developers

    • I am an ATT user, I guess the merge would not impact me much. But for T-mobile user, they may see a hike on price as T-mobile used to have the cheapest plan. To save money, it is better to do some research before spending. is one of the best site for me to find the best price for local shopping restaurant and entertainment.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.