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

Steve Henn Mar 21, 2011
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AT&T’s acquisition of T-Mobile: The ripple effects

Steve Henn Mar 21, 2011
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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.

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