Thursday, September 01, 2011
Not Dead…Yet
Today’s online Wall Street Journal has a great graphic outlining the history of U.S. telecom consolidation, and how the top 5 carriers came to be who they are. In particular, it paths AT&T's complicated landscape of mergers, acquisitions and divestitures that gave birth to the whole tangled web (remarkably similar to a NYC subway map!)
Despite recent action by the US Department of Justice threatening to block the merger between AT&T and T-Mobile USA, the deal is not dead…yet. It’s just so dangerously close to changing the competitive landscape forever.
Says the DoJ, the transaction could lessen competition for wireless services, resulting in higher prices, lower quality, fewer choices and fewer innovative products for millions of consumers nationwide.
Back in March, I posted a blog here discussing how if the deal went through, the US market would dwindle to just 3 big players as (smaller) deals seemed to flow fast and furious. At the end of the day, AT&T needs this deal to happen to address a capacity crisis led by the explosion of data-hungry smartphones. Networks are virtually choking on data, and adding T-Mobile’s network would fix this…at least temporarily. But truth is every carrier is experiencing the same shortages, and with fewer and fewer networks to acquire, today’s DoJ action may be the catalyst that finally forces the industry to have another look at addressing the load.
