Telecommunications moves closer to Duopoly

Bad news might be on the horizon for wireless phone customers. In a bold move, major wireless carrier AT&T has made a proposal to acquire T-Mobile. Both companies are major players in the telecommunications market and a proposed merger will create major implications for the market and customers alike. Along with Verizon, AT&T is one of the two largest telecommunications companies on the market right now, and the acquisition of T-Mobile will only increase it's already considerable influence over the market. When the Bell company, the last company to hold a monopoly on the telecommunications market fell apart, the industry turned into in a state of near perfect competition, allowing for better prices for costumers as the many telecommunications firms fought for more influence. Since then, mergers and acquisitions have led to many companies being absorbed into one another, most notably in the past few years the merger of AT&T and Cingular. The current market is in a state of Oligopoly, with the major providers of wireless telephone service in the United States being Verizon, AT&T, T-Mobile and Sprint. The decrease in competition in the telecommunications industry has led to increases in prices over the years with only marginal increases in quality. Phones today require expensive data plans and have many underlying charges while the quality of the product depends mostly on personal preference and the region you live in. The proposed $39 Billion dollar acquisition of T-Mobile goes through, the wireless industry will likely turn into a 2 horse race between AT&T and Verizon. There are likely to be few challengers capable of keeping up with the two new powerhouses of the industry, as both Verizon and AT&T have very sought after phones on their rosters. Both carry the ever popular iPhone and an array of smart phones that continue to gain in popularity as new technology becomes available. The merger also puts pressure on Verizon and slightly less powerful Sprint to snap up smaller companies as a bid to keep up with AT&T. The lack of quality in other carriers such as Boost Mobile or Cricket wireless, who typically provide pay-as-you-go plans, are unlikely to attract customers away from the major companies regardless of price increases. A new wireless market composed of two giants is likely to lead to more headaches for wireless costumers as less competition and limited regulation in the industry will likely lead to even higher prices for what many now consider to be an essential technology in their life.

http://www.fool.com/investing/fiercemarkets/2011/03/23/atts-proposed-t-mobile-acquisition-going-from-mono.aspx
http://blogs.seattleweekly.com/dailyweekly/2011/03/att_to_eat_t-mobile_in_39b_mon.php
http://articles.latimes.com/2011/mar/21/business/la-fi-att-tmobile-20110321