Recently, debate over the proposed merger of two phone companies has been clogging the tubes of the tech world. Cellphone giant, AT&T, announced on March 20th that it has agreed to acquire T-Mobile USA for a whopping $39 billion dollars. To most, this would seem to be a considerably hefty price, but in reality, the acquisition’s benefits outweigh its disadvantages for AT&T. From this purchase, the company would gain substantial network space, which would assist it in relinquishing its dismal reputation as being “the network with the most dropped calls,” as well as aid in the development of its up and coming 4G network. Though that news alone is significant, it is not what has become the center of a considerably heated debate.
AT&T and T-Mobile cellphones operate using a technology called Global System for Mobile Communications, which is more commonly known by its acronym, GSM. GSM is the international standard for cellphones, and is used by consumers across the globe. Why does it matter that AT&T and T-Mobile are GSM carriers? Well, they are the only GSM carriers in the United States, as other American cellphone giants, such as Verizon Wireless and Sprint NEXTEL, use a different cellphone technology, CDMA.
Considering that this merger would produce a monopoly of sorts on GSM technology in the United States, many prominent figures in the cellphone industry have risen in an uproar, opposing the union of the two companies. Cellphone manufacturers such as Motorola and HTC are among those who are against the merger, because If there is only one GSM carrier in the United States, that carrier can now dictate the prices of the mobile phones it buys from manufacturers, as they are their only GSM customers, ultimately controlling the amount of profit the manufacturers achieve.
Another company that has strongly voiced its opposition towards the merger, is Sprint NEXTEL. As of now, Sprint is number three on the list of largest cellphone carriers, above T-Mobile and behind AT&T. If T-Mobile is acquired by AT&T, AT&T will skyrocket to the top of the list, above Verizon Wireless, leaving Sprint still in third, but a considerably smaller company than either AT&T or Verizon, eliminating it from being any sort of competition to either network giant.
So, what does this mean for consumers across the nation? Well, if you belong to a CDMA service provider, and you never plan to leave the country, you are the least affected by this, and you probably have an indifferent standpoint on the whole debacle. If you are a GSM user currently on T-Mobile, or a future GSM user, you are most effected by the merger, and should view this dilemma as a cause to protest. For current T-Mobile customers, the future of your phone bill is unclear as of now, but expect to eventually have to pay AT&T’s exceptionally expensive rates. As for future GSM customers, you will only have one choice in carriers, and if you do not favor their price, tough luck.
Reviewing all of the facts, it is evident from this acquisition, AT&T is concerned only with their own personal growth, and the growth of their customer ecosystem. It is unfortunate that they are more concerned with the future of their company, and not with American consumers as a whole. Then again, in an industry as competitive as the cellphone industry, the favored saying must be, “to survive, you either have to eat, or be eaten.”