Although the merging of AT&T and T-Mobile has benefits by obtaining more towers for better service, I agree with the Department of Justice’s lawsuit to block the merging of the two cell phone companies.
The consequences would outweigh the benefits if the two companies were to combine. The merge can result in possible layoffs for many people, create challenges for the cell phone market and there is a chance of AT&T and T-Mobile not working well together.
If AT&T and T-Mobile became one company, most of the competition will be between AT&T and Verizon. There is a great chance for a decline in most cell phone companies, especially since both Verizon and AT&T have the I-Phone (one of the most popular phones on the market). If Sprint, U.S. Cellular or other smaller companies were to go out of business in the future, it would then leave customers with only two major options to choose from for cell phone service. This gives the companies the power to raise prices or create limitations.
James Burton, associate professor of management, said there is an absolute chance for a rise in prices. There will be two major carriers with less competition and consumers will have to pay more. In this day and age, people can barely leave the house without their phone and use it for just about everything. People would have no choice but to deal with the outcome.
In a press release from Businesswire, AT&T wants to merge because they need to keep up with competition. They also want utilize the extra towers T-mobile has to create a better service and provide less dropped calls for their customers. AT&T says that one of the benefits of merging would allow it to create a lot more jobs for people.
In our economy, that would be a good thing, but here it’s not the case. If AT&T merges with T-Mobile, most of their competition will come from Verizon. What about all the other cell phone companies that might decrease in business and eventually have to fold? Employees of smaller cellphone companies will lose their jobs. So in reality it’s not increasing more job opportunities. Burton said there is a huge possibility for job decrease. Besides the problem of other companies declining, there are also some AT&T and T-Mobile stores that will have to close.
Theoretically the benefits of two companies merging are to create more efficiency and productivity. Burton said in most cases this doesn’t happen. A common problem that exists when two companies merge aside from a huge loss of jobs is different beliefs from the two different companies. Everyone has their own way of doing things and taking control. It wouldn’t be a surprise to find some obstacles when putting two major merging together.
“The merging of two different companies may fail because of the clash of two different cultures,” Burton said. It can almost seem as if AT&T is buying out T-Mobile, rather than combining forces. If they do combine, it will be under the company name of AT&T and T-mobile will basically cease to exist.
I’m sure for the consumers who are dissatisfied with AT&T are in favor of this movement for the benefit in improvement of their cell phone service. Realistically, it’s not worth the burden of it all. This will only damage our economy more in the long run.