As a loyal AT&T customer dating back to the AT&T and Cingular merger circa 2006, I was initially elated about the proposal for my mobile service provider to merge yet again, this time with T-Mobile. 

The partnership would mean more resources and more resources means less dead zones. This translates to virtually uninterrupted access to Twitter, Facebook, email, Words with Friends and the other 100-something apps on my phone. But at what cost?

Eager to learn exactly what kind of perks the marriage of AT&T and T-Mobile would offer me, I sifted through the particulars of the proposal. My elation rapidly deflated: The dirty details diminished the seemingly flawless façade of the fantasy of a supreme mobile network.

Last Wednesday, the U.S. Department of Justice issued a lawsuit to prevent the merger after concerns were raised about its effect on American consumers.

The merger has been called un-American. It’s been denounced by Minnesota senator Al Franken as ‘an unreasonable risk to the economy.’ The text of the DOJ’s lawsuit warns that it would ‘substantially lessen competition.’

Yankee Group, an independent company that conducts research and provides analysis of technology companies, provided a summary of the bottom-line of the merger.

‘From a spectrum perspective, the merger of AT&T and T-Mobile appears to expand network coverage and improve performance for AT&T customers. From a market perspective, Yankee Group believes the merger will increase market concentration, reduce consumer choice and open the door for price increases in the most heavily populated U.S. wireless markets.’

In the game of mobile service providers with nationwide networks, there are four big time players: AT&T has 31.9 percent of the market share, 31.1 percent goes to Verizon, Sprint accounts for 16.7 percent and T-Mobile boasts the smallest piece of the pie at 11 percent. For those of you who are mathematically challenged, the merger would allow AT&T to sit comfy with approximately 42 percent of the market, outrunning its closest competitor by about 10 percent.

While AT&T is offering upwards of $39 billion for the merger ($6 billion of which is required to be paid to T-Mobile’s parent company, regardless of whether or not the merger goes through) and promises to move 5,000 overseas call center jobs back to the United States, figures indicate that the jobs lost in the intermingling of the companies would outweigh those gained. That market dominance would only benefit AT&T in the long run.

With all this in mind, it is no surprise that the proposal is drawing critique from all corners of the room. All corners except for one.

Verizon, the other massive player in the mobile service provider roster, has been noticeably absent from this debacle. A report from Reuters indicates that Verizon CEO Lowell McAdam, said the merger ‘makes sense’ and speculates that it will indeed succeed.

Should the merger succeed, the new market-share structure would leave the weakest of the trifecta, Sprint, in a very distant third place.

Analysis indicates that, should AT&T and T-Mobile merge, Sprint would account for so little of the market that it would only be a matter of time before it would be bought by Verizon, resulting in two giant service providers and the complete absence of pressures for competitive pricing.

Sprint CEO Dan Hesse stated in a panel last Tuesday that the merger ‘would stifle innovation and that too much power would be in the hands of two [companies].’

In this hypothetical world of mobile service dominated by two faceless and uncaring giants, that Words with Friends game could come at a much higher cost and with much spottier service.

Jessica Smith is a senior information management and technology and television, radio and film dual major. Her column appears every Tuesday. She can be reached at jlsmit22@syr.edu.

Published on September 5, 2011 at 12:00 pm