AT&T finally withdrew its bid to merge with T Mobile, ending what everybody knows would have ended up as a gigantic antitrust suit. AT&T’s last bid was for $36 billion dollars.
Both companies are not in the best position: AT&T is once again at the bottom of nearly every customer service poll in the nation, and lost another market share of iPhones when Sprint began carrying them this past year. T-Mobile, the number four carrier in the United States, is a mess. The merger, if successful, would’ve ensured two things: continued success for AT&T in spite of its low reputation for quality, and a monopoly. However, a number of executives would have become very rich.
Many critics, however, have noted that the merger may have been a survival move. The massive consumer move from cell phones to smart phones has caused a demand for high-capacity wireless service that is growing exponentially. The government recently passed legislation to open up more air waves for cellular use. Super Wi-Fi is already in the works, but said government legislation may be a monkey wrench down the line.
AT&T will have trouble buying the airwave space it needs to service its customers sufficiently. What does that mean for consumers? AT&T will likely become a less attractive cell phone provider option in the coming years, while Verizon will continue to grow. Customers who flocked to AT&T just to get an iPhone can now get one with another provider.
The thing is the government has only kicked the can down the road in its desire to prevent a monopoly. It is likely that both AT&T and T Mobile are in for a very rough 2012 and beyond. Could Verizon emerge to become the next Microsoft, the next Google, the next Ma Bell—a company facing antitrust lawsuits to guarantee competition in the cellular provider industry?
One thing is for certain: cellular phones are a hot industry. Competition is fierce. Technology and consumer demand are evolving so quickly it’s impossible to keep up. With the whole technology sector of the economy in ridiculous flux, the future is hazy. However, consumers will continue to want good products and they want to receive good service. If AT&T doesn’t have a long term plan for providing good service to its customers, then bumpy waters are ahead for America’s first telephone company.