AT&T/T-Mobile Merger: More Market Concentration, Less Choice, Higher Prices

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.

Yankee Group believes the merger of AT&T and T-Mobile will have a negative impact on consumers and competition in the U.S. wireless marketplace. To counteract this negative impact, and to increase competition in moderately and highly concentrated markets, we recommend the FCC not allow this merger to proceed unless it is also prepared to maintain a stronger regulatory stance to avoid domination by the two largest carriers. Such a stance might include actions such as:

• Thinking creatively about divesture remedies.
• Enforcing mandatory, reasonable data roaming rates to facilitate competition
• Regulating unbundled wireless tariffs