Smartphone Makers, Customers Squeezed in Consolidated Market

 
 
By Don Reisinger  |  Posted 2011-11-29 Print this article Print
 
 
 
 
 
 
 


 

5. Further consolidation would be a possibility

But there's more to Sprint than just how it would be dwarfed. For one thing, it is quite possible that Verizon would respond by acquiring Sprint to get closer to the size of AT&T. In that scenario, the U.S. wireless market would only have two competitors, a concentration of market power that could only harm wireless users. Further consolidation was a near certainty if the AT&T, T-Mobile deal didn't fall off the rails.

6. AT&T leaves much to be desired

Let's take a quick look at AT&T. Sure, the company has the iPhone and it's huge, but the quality of its service has frequently been slammed by customers. What's more, it hasn't necessarily been so warm with Android handset makers, and its 4G rollout has been sluggish, to say the least. Simply put, AT&T has a lot of issues. So, why should anyone want to see it become the dominant force in the industry?

7. What about the phone makers?

As noted, AT&T hasn't always had the best relationship with Android vendors. But it goes beyond that. If AT&T is allowed to merge with T-Mobile, handset vendors would lose a lot of market leverage, since they would need to deal with a merged wireless giant to sell their devices at a profit. AT&T would have all the leverage. And that's not a good thing.

8. It could consolidate Apple's power

Following on the vendor theme, it's important to remember that Apple is a major AT&T partner. If AT&T and T-Mobile combine forces, Apple would start selling the iPhone to T-Mobile customers by default. That could further consolidate its power in the mobile space. Having the iPhone available on all major carriers would likely greatly shrink the potential market for the rest of the smartphone makers.

9. Customer service woes

Whenever two major companies combine to control a large majority of a market, it's rare that the new firm will provide ideal customer service. That especially won't happen if AT&T and T-Mobile combine forces. Both companies are widely viewed as some of the worst providers of customer service in the market. If they merge and are forced to go through the logistical nightmare of bringing two big companies together, how much worse would their customer service be?

10. Where is the added value to consumers?

At the end of the day, value to consumers is what needs to trump all other considerations in a merger proposal. Over the last several months, neither T-Mobile nor AT&T has made a solid argument for why the deal is good for consumers. Today's customers already have enough phone and service choices, and prices are in line with their expectations. What can a combined AT&T and T-Mobile do that the companies couldn't do separately? Don't know? Yeah, neither do they.

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Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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