For Consumers, Little to Cheer in AT&T Deal

By JENNA WORTHAM
NYT

The $39 billion proposed merger of AT&T and T-Mobile could save the companies a lot of money. For everyone else, it could cost a lot of money. No sooner did the two companies announce a $39 billion merger on Sunday than industry analysts began assessing the impact on the biggest potential losers in the deal: consumers.

If approved by regulators, the merger would leave just three major cellular carriers in the United States, a development that consumer advocates warn could eventually lead to higher prices for a wide variety of services. For this reason the deal is likely to attract close scrutiny in Washington.

It is too early to say how much — or even whether — rates might rise for consumers, who on average pay $55 a month for their wireless plans, said Roger Entner, who tracks the wireless industry for the Nielsen Company. But while consumers may see some immediate benefits — in network quality, for example — they are not likely to benefit in the long run, some analysts and industry experts said.

The bottom line, they said, is that competition is likely to suffer, leading to higher prices and less innovation. That is because the deal would leave just AT&T, Verizon Wireless and the much smaller Sprint to divide up the voracious smartphone market — with the AT&T and T-Mobile union likely to dominate the market.

(More here.)

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