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AT&T/T-Mobile merger could put Sprint out of business

September 12th, 2011 at 2:20 PM

Chitika Insights, Chitika’s research arm, recently proposed the question “What if AT&T and T-Mobile actually merge?” and created a graph of what the wireless landscape in the United States might look like if AT&T’s proposed $39 billion takeover of T-Mobile USA is passed. Chitika concluded there could be calamitous consequences for Sprint and various regional carriers such as Boost and MetroPCS. If the merger is approved, AT&T and T-Mobile will have more than 130 million subscribers and 51% of the U.S. wireless market based on usage, Chitika’s data suggests. “[The] projection shows the immediate impact of the merger, so the smaller network’s share looks unscathed,” the company wrote its blog. “However, the future consequences are dire for the smaller networks because the AT&T/T-Mobile network would be able to dictate market prices.” Sprint and smaller carriers such as MetroPCS and Boost may lose customers to “the greater combined coverage of the proposed behemoth,” too, while Verizon’s usage share would sit at 33%. “If this merger were to pass, it would almost certainly put companies like Sprint, MetroPCS, Boost, and other smaller networks out of business.” Chitika concluded. “Therefore, Sprint’s interference isn’t a surprising move in the least.” Sprint and the Department of Justice have both sued in an effort to block the merger.


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