Small, regional telecom companies have been involved in merger talks, not just big players like Dish.
Small, regional telecom companies have been involved in merger talks, not just big players like Dish. - 
Listen To The Story

Merger mania has hit the telecommunications industry: Time Warner Cable and Charter, Dish and T-Mobile, AT&T and DirectTV — and Atlantic Broadband and Metrocast Communications of Connecticut. 

Yes, even small regional cable companies are growing through acquisition. Greg MacDonald, head of research at Macquarie Canada, says it's for some of the same reasons as the large ones: economies of scale, and maybe some bargaining muscle.

But SNL Kagan analyst Ian Olgeirson says the small fry don't get the same advantages as the mega-mergers when it comes to striking deals with the companies that sell programming. "What they're really looking for is, you don't need two accounting departments, you don't need two HR departments," he says. "Those kinds of fairly straightforward type of operating efficiencies."

But those smaller benefits don't necessarily come with a smaller per-customer price tag, which is one reason law professor Peter Carstensen says the urge to merge is often irrational. In fact, he says, most mergers fail.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.