- Post 28 June 2011
- By by Karen Hawkins and Michael Tarm
- Hits: 173
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