Four major players currently dominate the wireless realm: Verizon, AT&T, Sprint, and T-Mobile â€“ which is owned by Deutsche Telekom. If this merger takes place, AT&T will leapfrog over Verizon, leaving Sprint a distant third.
Fewer competitors isnâ€™t necessarily bad for consumers, notes Fordhamâ€™s Professor Griffith. â€śMarkets can be competitive with two people as long as they are competing on price,â€ť he says.
In its Sunday announcement, AT&T said that 18 of the top 20 US local markets have five or more providers: â€śLocal market competition is escalating among larger carriers, low-cost carriers and several regional wireless players with nation-wide service plans.â€ť
Citing a report from the General Accounting Office, AT&T said the inflation-adjusted average price for wireless services declined 50 percent from 1999 to 2009 â€“ a period with five major wireless mergers.
However, the FCC may want to study more recent price trends. In mid-2010, the Justice Department revised its merger guidelines. â€śA big theme of the new guidelines is how much pricing pressures change,â€ť says Tim Tardiff, a principal at Advanced Analytical Consulting Group, based in Boston.