IT Management Slideshow: ATT, T-Mobile Merger: 10 Reasons It's Bad News for CIOsBy Don Reisinger | Posted 09-08-2011
ATT, T-Mobile Merger: 10 Reasons It's Bad News for CIOs
Could Prices Go Up?Critics (including the DOJ) argue that if the AT&T and T-Mobile merger is approved, wireless prices could go up. With fewer competitors, critics say AT&T and T-Mobile would have the power to set pricing however they like. The companies, on the other hand, claim that their combined services will enable them to offer attractive pricing options.
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Less Choice When it comes to technology decision-making, it's hard to argue with the conventional wisdom that having more services and device options to choose from is better for the enterprise. If AT&T and T-Mobile are actually allowed to merge -- which is looking far less likely as the days pass -- CIOs will have one fewer option for their U.S. wireless needs. That's not good for business.
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Nothing SpecialIf AT&T and T-Mobile were engaging in activities that bring added value to the enterprise, CIOs might get excited about the proposed merger. But the companies offer the same basic devices at the same basic prices, with little to no differentiation across their lines of service.
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4G Hype?The merger would reportedly enable AT&T to expand its 4G LTE wireless coverage to 97 percent of the American population (the company claims it currently reaches 80 percent of the U.S. population with 4G). However, reports question whether whether achieving this goal really requires AT&T to spend $39 billion to acquire T-Mobile.
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Too Little Leverage?If AT&T is allowed to merge with T-Mobile, CIOs will lose considerable leverage in making decisions about which wireless service providers they'll choose for their U.S. enterprise users. As anyone familiar with service negotiations will attest, losing leverage is never a good thing.
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Further Consolidation?If AT&T is allowed to merge with T-Mobile, it would embolden a company such as Verizon to make a bid for Sprint. After all, AT&T would be a powerhouse in the wireless space, and Verizon, trying to keep up, will need to respond. The last thing CIOs want is further consolidation.
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What About The Handsets? Although CIOs continue to deploy the ubiquitous BlackBerry smartphones, the enterprise is also beginning to embrace other smartphones, including Apple's iPhone as well as Android options from a range of carriers. Choice could be limited if AT&T is able to ink exclusivity deals on the hottest smartphones, as it did with the first iPhones.
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Tablet ConcernsCritics say a giant AT&T could have the clout to dominate the tablet space, effectively quashing competitors Verizon and Sprint. As we've said before, less choice is bad news for CIOs looking to empower workers by deploying these lightweight devices.
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What About Service Quality?Wireless service quality could become less reliable as the combined firms try to work out all the kinks likely to result form integrating their services. That alone may be enough to scare CIOs.
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What's the Benefit?Critics say the deal would create a massive wireless behemoth that could put enterprise wireless customers at a severe disadvantage. Critics argue that the resulting company would be able to rule with an iron fist over the entire wireless industry. If this is the case, then CIOs and their U.S. enterprise users are unlikely to benefit from an AT&T and T-Mobile merger.