[yankee group] AT&T's proposed $39 billion purchase of T-Mobile USA will have a negative impact on consumers, warns a new report released by leading mobility research firm Yankee Group. After analyzing Yankee Group consumer data and using the U.S. Department of Justice's (DoJ's) market concentration metrics, Yankee Group contends the merger will increase market concentration, decrease competition and raise average mobile prices in the most heavily populated U.S. wireless markets. The firm urges the FCC to block the merger unless it plans to take a stronger regulatory stance.
"We believe this merger will reduce choice for consumers and, more importantly, leave little incentive for AT&T to offer competitive pricing for unbundled mobile services," said Gigi Wang, Yankee Group's chief research officer and co-author of the report, "AT&T/T-Mobile Merger: More Market Concentration, Less Choice, Higher Prices."
The report also concludes the AT&T/T-Mobile merger would:
-Give AT&T more than a 50 percent market share in five major markets: Dallas, Houston, Miami, San Francisco and St. Louis.
-Grow the number of highly concentrated top 27 cellular markets from 1 to 17, reducing network choices in those markets.
-Increase mobile phone bills in seven major markets: Seattle and Houston would see mean increases of more than $5 per month, and Boston, Dallas, Los Angeles, Miami and New York would see increases of less than $5 per month.
Yankee Group recommends the FCC:
-Think creatively about divesture remedies.
-Regulate unbundled wireless tariffs.
-Enforce mandatory, reasonable data roaming rates.
"We think that the FCC and DoJ now have to step up to the plate and regulate," said Carl Howe, research director at Yankee Group and co-author of the report. "Our research shows that the U.S. wireless market is maturing into a duopoly. While agencies were reluctant to regulate too strongly in years past because they didn't want to upset a nascent marketplace, those days are now over; it's now time to get back into the game."
Yankee Group to FCC: AT&T/T-Mobile Merger Will Result in Higher Prices
see also report from Yankee Group