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We have to hand it to the AT&T brand. |
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This brand has some amazing DNA. |
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Released on Saturday, September 10, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - The US Justice Department in late August moved to block the AT&T merger with T-Mobile. The block is based on assumptions of what AT&T might do after acquiring T-Mobile. The argument is that the US Justice Department is making is that the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services.
We believe that with more people in AT&T's network that there would be less out of network calls in a combined situation. This would decrease the amount of minutes used and in turn be less expensive for consumers.
Customers of the combined company would have a vaster network when traveling. This would also lower costs, including voice and data costs.
Apple's products and Google's Droid phones are extremely high quality. If quality is the question for consumers, then they can upgrade their phones to one of these products. Howeaver, we don't believe quality will become a question with the kind of hardware makers that exist in the US and around the World.
It's true that an AT&T/T-Mobile combined company would have around 129 million subscribers, Verizion would have around 101 million and Sprint would have around 50 million. This situation does leave Sprint out in the cold to fight for themselves against the two industry giants.
This is the problem that the Justice Department most likely sees, that Sprint would then possibly become a buyout candidate by Verizon. But, why would this be any different than what has happened in the past? Industries consolidate and two juggernaut players tend to emerge as industries mature.
It is amazing that AT&T even made it to the point of this type of scrutiny again. We have to hand it to the AT&T brand. This brand has some amazing DNA. AT&T was broken up in 1984 and they are back again at juggernaut level.
The great J.D. Rockefeller put companies and industries together like no one else including merging companies together to form Standard Oil and craftfully placing industries like energy and transportation strategically together.
AT&T is just doing its best to compete in a business world where bigger tends to win. AT&T and Verizon may eventually have to face off with Chinese companies or others around the World.
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