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Will AT&T's T-Mobile buy lead to a duopoly?

Brad Reed | March 21, 2011
The wireless services market consolidates down to three big players

On the other hand, Sakpal does think industry consolidation has been on the whole good for many wireless subscribers, as it's allowed carriers to provide more coverage to more places and to help consumers avoid costly roaming charges. He thinks that AT&T's T-Mobile acquisition will work out especially well for customers of both carriers since AT&T and T-Mobile both already are using HSPA+ technology for their mobile broadband services and both are planning to launch LTE networks over the next two years.

Gartner analyst Phillip Redman also sees further consolidation in the wireless industry as a potential positive because it could open up space for Sprint to solidify its reputation as a low-cost wireless carrier that places no data caps on any of its monthly data plans. He also notes that there will still be strong competition on a local level with small wireless carriers competing with the national carriers for coverage.

"Most people in the country don't need nationwide coverage," he says. "The majority of people want good local coverage."

ABI Research analyst Aapo Markkanen also thinks the merger could prove to be a net positive for the wireless industry but only if the FCC imposes new restrictions to the roaming fees it charges to carriers without nationwide coverage or if it requires them to share more of their cell sites with regional players. He also says that the newly formed company would have to give up significant chunks of its spectrum in order to win FCC approval.

"Moves like that could level the playing field in the favor of Sprint and the regional players quite notably," he says. "All in all, how well this move will play out for American mobile customers is mainly down to regulation."

 

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