Cellphone Merger Aims at your Wallet

Original: April 26, 2011 Issue 15

By: Toby Kutler

Contributing Writer


Merger of AT&T and T-Mobile could trigger other mobile companies to be purchased.

Consumers will soon be forced to pay up to fifty percent more on monthly internet access on cell phones, according to Nightly Business Report. Recently AT&T (which is currently ranked as the second largest cell-phone provider) proposed a 39 billion dollar buyout of T-Mobile.

This merger is expected to affect 90 percent of US consumers who use and depend on internet access on their cell-phones. With this merger AT&T will become the largest cell-phone company in the world and this will directly affect the prices of their competitors. Three cell-phone companies would now be the sole distributers of cell-phone internet access; AT&T, Verizon and Sprint-Nextel.

With this merger AT&T/T-Mobile will take over as the world’s largest cell phone provider. Verizon will be likely to try to gain back their status as world’s largest cell-phone company. In order to do this, Verizon would need to buyout Sprint-Nextel. This would truly be a disaster to those dependent on internet access.

If this merger between Verizon and Sprint-Nextel actually happens, monthly rates for internet access on cell-phones could reach as high as $110 a month according to Nightly Business Report. Internet access on cell-phones would be dominated by two giant powerhouse companies. Of course this merge is only speculation, but sources such as “Market Watch” are predicting this eventual merge.

For all cell-phone consumers who use internet access the proposed buyout between AT&T and T-Mobile is only bad news. Consumers may now have fewer choices and options when it comes to cell-phone providers. This could lead to cell-phone companies raising their prices because they can afford to do so because of lack of competition.

One possible advantage of this merger is the opportunity for smaller cell-phone companies to expand their business and compete with the bigger companies. Some smaller companies may be forced to adapt their business to meet the needs of their customers; which would be providing internet access on cell phones.

If this proposal is accepted expect for smaller cell-phone companies such as U.S Cellular, Boost Mobile and Cricket Wireless to start offering cell-phone internet access.