It is not often that a $39 billion corporate merger stirs comment all the way down to street level.
But such
is the complexity and breadth of the telecommunications industry – with cable,
cell phones and Internet access – that the proposed purchase by communications
giant AT&T of cellular phone company T-Mobile, that some unlikely persons
are taking notice.
The
merger will create the nation's largest cellular phone company, and will
concentrate nearly 80 percent of cellular phone users with two companies -
AT&T and Verizon. That has caused some to oppose the deal, because they
fear that having that “duopoly” will constrain competition and keep prices
high.
But there
is already healthy competition between the big players in the industry - which
includes U.S. Cellular and Sprint and a host of regional providers, such as
Cricket and Boost Mobile. Verizon is certainly not going to roll over and
simply cede the market to AT&T, so it will redouble its efforts to retain its
subscribers, and so will the other companies. That means competition, which
could - though not always - yield lower prices and more products.
Other
complaints raised from those in opposition to the deal is that it will cost
jobs - particularly minority jobs - at a time when the jobless rate is already
much too high. We have no doubt that the consolidation will shrink the expanded
company’s payroll, with attrition and redundancies addressed.
However,
we’re also confident that the diversity practices employed by AT&T will be
a quantum improvement to those of T-Mobile, which is owned by Deutsche-Telekom,
a German company that has not embraced diversity at all.
AT&T
says that the creation of the new larger company will expand wireless and
Internet coverage to wider swaths of the U.S., particularly rural areas. We’ve
seen the maps that show where the expanded coverage will be, and frankly, we
don’t see that as particularly helpful to minorities, who tend to be
concentrated in urban areas that are already well-served by all of the wireless
companies. However, that access can be improved, and AT&T says that with
the additional spectrum that will be acquired with the purchase, they can bring
a better product to all of its subscribers - including the new T-Mobile
subscribers, even in urban areas. We shall see, and several African American
institutions – including the NAACP, National Urban League, Congressional Black
Caucus and the National Newspaper Publishers Association – have given their
blessings to the deal but with a watchful eye that AT&T lives up to those
promises.
The
bottom line is that Deutsche-Telekom is looking to get out of the American
wireless market, and it will sell of its subscribers and the wireless spectrum
it owns. It cannot compete in the U.S. market or shore up its domestic market
without a huge influx of cash.
AT&T
has stepped up to purchase those assets and has shown a willingness to work to
both shrink the digital divide that threatens to leave too many African
Americans behind in this technologically-savvy era, but also work with minority
vendors to make sure they are part of this rapidly growing industry.
We will
be watching to make sure that jobs are not lost and service is not curtailed.
But this merger sounds like a win-win for the Black community.
Copyright
2011 Chicago Defender
