AT & T announced the purchase T-Mobile's Deutsche Telekom for $ 39 billion.
The U.S. announced acquisition of wireless carrier T-Mobile, Deutsche Telekom-owned by AT & T puts the dilemma facing the authorities to guarantee freedom of enterprise and, in turn, free choice of consumers.
The agreement involves about $ 39 billion and result in the union of the two firms are the second and fourth place in the cell phone market respectively.
operation is finalized, AT & T would add about 34 million to 96 million users already have and would become in the largest sector in the U.S., surpassing its direct competitor, Verizon. The announced merger
lit alarms in Congress, where representatives of the Subcommittee on Trade, Technology and Communications warned that closely monitor the process to be sure of enforcing antitrust law.
From the company, meanwhile, say they will improve the quality of service and will incorporate new technologies.
concentration risks
Professor Spencer Waller, director of the Institute for the Study of Competition and Consumer Loyola University Chicago, argues that the operation "will to mean that most of the country, people will go from having four large companies to choose to have three, if the merger is approved.
This agreement will be reviewed by the Federal Communications Commission and also the Antitrust Division of the Department of Justice, the latter in particular will examine whether competition and consumers can be affected by this merger
Spencer Weller, Loyola University of Chicago
Speaking to BBC News explains that "this increases the likelihood that competition may be affected, which may increase prices and selection options User may decrease.
For Waller, one of the concerns is that "while T-Mobile with 10 or 12%, has a large market share, is seen as a strong competitor with prices often lower than AT & T, Verizon and other companies. "
In this regard adding that" if it is out of the market, there is concern that prices will rise and the options are reduced. "
The question arises is whether the merger "will allow to obtain benefits such as reduced costs with the consequent lowering of prices and, in turn, be sure that the choices of consumers are not going to significantly reduce" says researcher William Shughart The Independent Institute and professor at the University of Mississippi.
Shughart She told the BBC, the authorities will try to see that "in each market area, consumers are at least two options for mobile services" and the question is whether "can identify the states or regions where a merger may reduce the number of options. " A long process
The company argues that the merger will improve coverage and introduce new technologies.
Following the announcement of the acquisition starts now a process which will culminate in the approval or rejection of purchase, whose duration is estimated at one year.
"This agreement will be reviewed by the Federal Communications Commission and the Antitrust Division of the Department of Justice, the latter in particular will examine whether competition and consumers can be affected by this merger," said Waller.
Although you can not predict the outcome, argues that "the government is very careful when a 30 or 40% of the market is concentrated in one firm."
Another thing that the authorities will need to consider is "whether the merger can produce more efficient or incorporate new technologies that benefit the consumer and then the end will have to balance. "
That seems to be one of the arguments that AT & T submitted to the authorities.
In this regard Randall Stephenson, CEO of the company was confident and announced that the merger will improve the quality of coverage from the addition of more antennas for cellular telephony.
Speaking to the press, Stephenson added that with the combination of AT & T and T-Mobile will expand access to broadband through wireless connections in rural areas, a goal which, according to analysts, is driven by the Commission FCC.
Though the end is open, the market welcomed the announcement with significant increases in the price of the shares of the companies involved.
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