AT&T's acquisition of T-Mobile: The ripple effects

Executives at AT&T attend a news conference where it was announced that AT&T Inc. will be buying its wireless rival T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock on March 21, 2011 in New York City.

Kai Ryssdal: At $39 billion, AT&T's proposed purchase of T-Mobile is one of the biggest deals since the recession started. That much has been all over the news today. What hasn't gotten a lot of attention is how it could reshape one of the most innovative parts of the American economy: mobile. And not just how it affects Sprint or Verizon, either.

The AT&T-T-Mobile deal could change the rules for everyone from app developers to Microsoft, Google and Apple.

Marketplace's Steve Henn reports.

Steve Henn: Back before mobile phones had apps, carriers like AT&T wanted to control what software was on your phone -- what it did and how it was sold. Then in 2008, Apple created its app store and it just forced AT&T to live with it. Apple could get away with that because AT&T needed the iPhone more than Apple needed AT&T.

Parul Desai at Consumers Union says this merger will change the equation.

Parul Desai: As the market becomes more concentrated into a just small number of wireless providers, it becomes increasingly more difficult for innovators and entrepreneurs to disrupt the market.

Just two companies -- Verizon and AT&T -- will have locked up access to four of every five mobile subscribers in America.

Charlie Golvin is a mobile analyst at Forrester.

Charlie Golvin: No question AT&T's leverage would go up.

Golvin says if the deal goes through, AT&T might be able to demand price concessions from manufacturers of handsets. Or it can ask for phones with specific features or software that work with other AT&T services. Desai says this could have a huge impact on mobile innovation.

Desai: And that's what's most important here, is the ability to access the wireless network, whether it's offering a video service, offering a payment service or any other service or innovation maybe we can't even think of right now.

In a post-merger world, just two companies -- Verizon and AT&T -- would become gatekeepers, controlling access to more than 200 million customers.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.


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