Analysis of the attempted merger of AT&T and T- Mobile Research Paper

Analysis of the attempted spinal fusion of AT&T and T- Mobile - Research Paper Example both(prenominal) the organizations contended that the proposed merger lacks the capability to affect the wireless service competition. They stated that other wireless service providers can easily replace the competition lost because of merger and the merger would dwarf the effects of anti-competition. AT&T hoped to buy T- spry from Deutsche Telecom with the deal amounting to 39 billion dollars. With the effect of the deal AT&T became the largest mobile phone service provider in United States as the deal came with more than 33 million subscribers. If the deal would have been accepted AT&T would have enjoyed a market share of 43% widening the gap with the competitors further (Communications Workers of America, 2011). Research questions Whether the attempted merger between AT&T and T-mobile levelheaded or not. Literature Review and Analysis Some researchers posed the thought that the merger would co ntri scarcelye to enhance the market power. The wireless market as swell up as the post paid market is highly concentrated at the national level using the brink of guidelines of Horizontal Merger. The concentration falls in the range where DOJ and FTC conclude. The guidelines provide that concentration and market shares are measured on revenue basis. The revenues are attributable to the facilities based carriers in the wireless market. use Herfindahl-Hirschman index they showed that the approach will contribute to enhance market power. It was found that T-mobile continued to be the significant competitor within the market structure (The sweet York Times. 2011). The other competitors did not have the capability to deal with the slack that resulted from the elimination of T-mobile from the framework of competition. The efficiency claims of AT&T were overstated and the efficiencies resulted from the merger was not pricy enough to overcome the effects of anti-competition. It was als o found that the merger was likely to increase the competitive disadvantages for the other players in the market (Besen, Kletter, Moresi, Salop and Woodbury, 2012). The costs got higher period the quality standard got reduced. The effect was also felt on roaming services by limiting the access of the players on leading edge handsets. The competitive import of the players would have suffered and would have led to recreation of wireless duopoly. The prices of wireless services fell and reversion to effective duopoly would reverse the gains from wireless competition. The merging companies were not whirl differentiated products at different local prices on the basis of local conditions of competition. Therefore it was necessary to evaluate the competitive effects of national market as well as the separate conditions in different local markets (The Centre of Media Justice, 2012). If concerns are found at the national level then it would not be possible for the concerns to take care of the localized markets. At one time the Guidelines of merger stated that only small antitrust markets would be analyzed but the approach is ignored by antitrust agencies policies. If the deal would have really taken place the consumers would have been harmed by two waves. The current customers of T-mobile will right off have to opt for AT&Ts expensive phones and data plans rather than the value priced smart phones and cheap data plans. The main aim of AT&T in the merger was to create a