Thursday, May 19, 2011 | ATT Wireless, Consumer Reports, Data Plans, Merger, T-Mobile, Verizon Wireless | 0 comments »
Consumer Reports survey says that T-Mobile customers are paying $15 to $50 less per month or $600 per year less than comparable plans from AT&T. Will T-Mobile customers be able to keep these plans or will prices be raised by AT&T? 34 million T-Mobile customers are going to be forced to pay a higher rate if they switch phones in the future. Not only that but AT&T would not have any GSM handset competitors and would be forced to pay monopoly rates and pass the costs onto consumers. If existing T-Mobile customers switch or upgrade their phones in the future they will be forced into new AT&T plans. The elimination of T-Mobile would remove the incentive to compete on price and pave the way to a duopoly market structure. AT&T knows they can afford this merger because if they raise prices it will pay for itself in only a few quarters if customers don't leave. T-Mobile is currently doing about $22B per year in annual revenue and if prices were raised by 30% it won't take long to pay for the $39B acquisition.