The first thought I had when I heard about the proposed merger of T-Mobile and AT&T was that the end-result will be that the consumers will be screwed. So I didn't any stinking NY Times or CNN analysis to confirm that. For one thing, all of the T-Mobile customers with 3G phones will find themselves owning useless hunks of tech.
T-Mobile was small, but they pushed the envelope on technology. When there are fewer companies in any market, innovation suffers 9because they institutionally become lazy) and the prices go up. The merger effectively leaves two giants controlling most of the cell phone market and, if history is any judge, the smaller cell phone companies will be squeezed out.
Business always tries to squish out competition and to monopolize a market. That's the way it has always been and when they succeed, prices skyrocket.
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Go to the western Pacific Rim and experience a truly competitive market, technology and infrastructure that is at 5G and closing on 6G, governments that understand that cutting edge and universally accessible broadband and cell service is an matter of economic necessity to dominant the world markets....and *cheap* service.
America, whose "citizens* are the captive markets of ruling corporations, is falling farther and farther behind.
It's important to realize that Smith's Invisible Hand was NOT a call for unlimited free markets, but rather for government to put limits on the monopolistic and oligopolistic practices of cartels, so the coporate gorillas wouldn't stifle free markets
1) T-Mobile was not small. T-Mobile was the American division of Deutsche Telekom, which serves far more customers than AT&T knows exists, and the American division was created by buying cell phone provider Voicestream and various other regional providers. The problem was that T-Mobile did not have enough frequencies allocated to them to do "real" LTE 4G here in the US (as vs. the HSPA+ "fake" 4G they deployed, which is more properly "3G+", which AT&T has also deployed but didn't make a big deal out of), due to the fact that they weren't here in the U.S. market when all the frequency auctions were going on and thus had the dribbles they got when they bought the regionals, and Sprint, AT&T, and Verizon do have 4G frequencies available. They looked at buying some of Sprint's excess Clearwire frequencies (Clearwire is currently using less than 10% of the frequencies available to them), Sprint wouldn't sell. The writing was on the wall. Without government intervention to get them some more frequencies, there just wasn't any "there" there, they were at a dead end and would be uncompetitive within five years after AT&T and Verizon complete their LTE deployments and Sprint rolls out Clearwire nationwide. And the Obama FCC certainly isn't going to do any government intervention to foster competition. Horrors!
Given that, this is probably a best-case scenario for DT and for customers. T-Mobile customers would have lost access to smartphones after a while anyhow, because within the next five years vendors are going to quit making 3G phones, it's going to be LTE everywhere, world-wide, and the average smartphone only lasts three or four years due to wear and tear. At least now the T-Mobile customers now know where they're going.
2) As for the "fostering innovation" bit, most innovation in the cell phone market comes from outside the United States. Both HSPA+ and LTE 4G were invented outside the United States, as was the GSM technology used by AT&T and T-Mobile. The exception has been in smartphones, with first Palm and Microsoft and now Apple and Google being the standard-bearer there for "easy to use" and "geek toy" smartphones respectively, but RIM (Blackberry) is a Canadian company, and Nokia is of course Finnish, and both spent quite some time at the top of the smartphone market too. Still, the U.S. has been the primary market for smartphones, and mostly *because* of the fact that the market is so uncompetitive, because that allows massive subsidies of smartphone prices. That $199 you fork over for the iPhone cost AT&T over $500 to buy. They eat the rest of that cost to lock you into a 2 year contract.
And finally,
3) This isn't the first time AT&T customers had to do this transition. AT&T Wireless's first network (when they were real AT&T) was TDMA. When AT&T Wireless got bought by Cingular, for a time Cingular ran both TDMA and GSM but eventually forced all the TDMA customers to migrate to GSM because TDMA did not support digital communications while GSM does. Technology moves on. LTE is the next generation of 4G technology just as GSM was the next generation of TDMA voice technology. Eventually *everybody* gets to move to LTE, do you really think that Verizon is going to keep its existing 3G network around once their LTE network is nationwide? AT&T is merely being honest about their plans to migrate 3G customers to LTE, which is probably a cardinal sin but so it goes.
Finally, regarding skyrocketing prices, we'll see. T-Mobile did have very good pricing. They had to, they didn't have the latest greatest phones and their service in many areas wasn't very good (I switched from T-Mobile to Sprint because in neither my apartment nor in my cubicle at work could I get T-Mobile reception), so ...
- Badtux the Technology Penguin
With AT&T and Verizon as the big dogs, which one will set the standard for customer service?
Ah, the mythical "free market." Those Robber Barons were just a fluke. Right?
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