Cellular network

AT&T-Mobile: Merger brings efficiencies, but will consumers see the benefit?

March 21, 2011: 8:26 AM ET

T-Mobile and AT&T say they won't have to raise rates to make more money after the merger, but it's hard to see how they could resist.

AT&T vs. T-Mobile

Image by misterjt via Flickr

At a recent investor conference, T-Mobile's top executives made a point of belittling data plans for smartphone users offered by rivals AT&T (T) and Verizon (VZ). T-Mobile's entry-level data plan costs $10, they pointed out, while AT&T demands 50% more for the same 200 megabyte-a-month plan.  That leads to an awkward question: Now that AT&T plans to buy T-Mobile, what's going to happen to those low cost plans?

Both federal antitrust regulators and the Federal Communications Commission, which has long functioned as an extra layer of antitrust enforcement in the telecommunications industry, will be scrutinizing the $39 billion deal.  The proposal to create America's largest cell phone company, with a record 130 million customers, will also force regulators to revisit an even more fundamental issue. In the cellular industry, how big is too big? More

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