Will AT&T's T-Mobile Buy-Out Get Approval?

There's little doubt among wireless customers that this is a merger that will be bad for business.  Already, competition between the two major US wireless operators seems to be squeezing out secondary players like Sprint and T-Mobile.

Tith T-Mobile out of the way, the US will have just one GSM operator, AT&T, and one major CDMA operator committed to LTE, and two minor CDMA operators, one of  which is committed to LTE and one of  which is not really sure what it's doing (Sprint).

The result for consumers: a nightmare of non-inter-operable handsets and long contracts with high prices and bad service.  Over the last few years,  the phone-y marketing battle between AT&T and Verizon has reached a fever pitch, but actual investment in new cell sites and bigger backhaul has been relatively slow.  And both companies have worked hard at throttling back "unlimited" data plans.

The result: prices are flat in the US while they're falling everywhere else.  GigaOm has a great article on how market concentration is damaging our competitiveness, and hopefully  the DoJ will work to block the merger.  Link.

If the DoJ doesn't block the merger, it could extract a set of concessions that might be be enough to increase competition in the market.  The GigaOm article talks about deals with rural carriers, but the biggest thing that the DoJ could do would be to strengthen Sprint and improve the prospects for MetroPCS as a truly national discounter.

Market concentration is leading to reduced CapEx and more marketing.  Photo by Smith.