Client Contests

Wednesday, March 30, 2011

T-Mobile Buyout, Good or Bad?




As you may have heard by now, on last week T-Mobile and AT&T agreed that AT&T could buy out T-Mobile.  From a network stand point it’s a great idea for AT&T.  From a consumer standpoint this takes away the option of having choices.  While this agreement has not been approved and could take up to a year to complete, opinions are already flying to question if this really is a good idea.  What is a monopoly? Per the definition on dictionary.com, a monopoly is exclusive control of a commodity or service in a particular market that allows manipulation of prices.  This is what AT&T stands to create in the mobile telecommunications industry.

There are two types of networks that are used for mobile technology. They are GSM and CDMA.  GSM stands for Global System for Mobile Communication, GSM phones use sim cards, which allow their consumers to use their phone almost anywhere by getting a new sim card in that new location.  CDMA stands for Code Division Multiple Access, it does not use a sim card and services are only dominant in the US and parts of Asia.   Without taking an in depth analysis, one might infer that the GSM is the better network to use.  T-Mobile and AT& T are the only two US carriers that provide GSM services.  AT&T buying T-Mobile gives them a monopoly in the GSM arena.  AT&T becomes the only option for having a phone carrier that is on the GSM network.  Being the only carrier gives AT&T a huge price advantage over the customer because they are the sole provider of such resources.  This seems like it is a great idea!  From a business standpoint it’s a great move, but is it so great from a consumer standpoint?

Looking at the deal from the perspective of a businessperson, especially one employed by AT&T and currently a consumer of AT&T this is a great deal.  With the addition of the iPhone AT&T has increased its users, but also decreased its available data handling capabilities.  This is a major purpose for the buyout.  AT&T needs to increase its towers and be able to provide better data connectivity to allow the users to get the best use of their phones.  By taking over all of the towers from T-Mobile, it also gains a huge chunk of the market share as well, which guarantees increased profitability.  So the businesswoman in me says sure, this is a great idea, but the consumer in me says, not so fast!

There is one thing that will make many current T-Mobile customers happy, the fact that they can now get the highly acclaimed iPhone, BUT, with a price.  T-Mobile offers unlimited data plans, but AT&T does not.  So what does that mean for you?  That means pay $45 for 4GB and don’t go over, but that doesn’t even include the cost to use the phone to make calls, and other taxes and fees associated with it.  Before you get so happy, you might want to add up the cost and make sure it’s really something to celebrate! 

For individuals who are completely satisfied with T-Mobile and their current phone selection options, this buyout isn’t sitting so well.  While an expanded network of towers sounds great, if nothing is wrong why bother it?  T-Mobile has great customer service and is very efficient in handling customer concerns.  Is AT&T prepared to handle this new line up of customers and their needs?  What happens if someone calls about a phone that AT&T doesn’t sell, who’s going to help?  Will T-Mobile’s employees lose their jobs?  So many questions, so many concerns.  As mentioned above, AT&T does not have an unlimited plan; will current T-Mobile customers be grandfathered in to their current plans?  Will they have to change their plans?  T-Mobile and AT&T never carried the same exact phone; will this new plan create more phones to choose from or less? 

B.M.M.O. Consulting concludes that this is a great business decision for AT&T to buy T-Mobile, but still believes there are too many unanswered questions to conclude if this is a good deal for the consumers.  The deal has yet to be finalized, and is already under review by New York’s Attorney General, Eric Schneiderman.  He considers T-Mobile a low cost option and doesn’t want the people of New York to be put in an unfair predicament.  Soon, other states may also begin to raise questions.  Hold on, this just might be a bumpy ride.  Only time will tell what the outcome will be and who will best benefit from it all.  Making the consumer happy should always be the first priority!

1 comment:

  1. HOLD ON. My first thought as a T-Mobile customer is "What phone service can I change to asap?! Can I break my contract when AT&T take over?" I have had ATT&T in the past. Years ago I switched from T-Mobile to ATT&T because I was not getting the best service as far as phone calls go. However I was sad to leave T-Mobile because their customer service was always TOP NOTCH. After 2 years with ATT&T I HAD to get away. Their customer service was VERY dissatisfying. I would FREQUENTLY have incorrect charges on my phone bill and would have to call and talk to rude people for hours trying to figure out what the hell went wrong. Literally....hours. I couldn't wait for my contract to be up, I almost broke it twice, but didn't want to pay the extra $150 fee or something like that. So eventually I was back to T-Mobile, great customer service and correct charges on my bill. Their plans are wonderful, their prices are great, and their people are irreplacable. I for one am not going to renew my contract when it is up until I know that my service will be the same quality...otherwise hello Verizon or Sprint!

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