7th December 2011 AT&T T-Mobile merger The current stiff competition in the business arena calls for adequate strategies by organizations in order to remain competitive. Some of the key aspects that companies have adopted in order to expand their market power are mergers and acquisitions…
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The merger, which was announced in March 2011, aims at expanding the financial soundness of the companies by increasing total sales. This paper evaluates the issues that surround the merger of the two companies. In order to evaluate the implications of the merger between the two companies, the paper will analyze the perspectives of the AT&T Company as well as the views of the government and the competitors. Telecommunication Market The US telecommunication industry is growing at a faster rate due to the high demand of the speedy services and broadband. The industry has been oligopolized by the consolidation of the telecommunication companies especially in 1990s. In order to acquire market power, telecommunication companies in US have emulated merger and acquisition resulting to a competitive edge in the local and international markets. Major mergers include Bell Atlantic and GTE in 2000, Cingular and AT&T Wireless in 2004 as well Nextel and Sprint merger of 2005. One of the major aspects that have resulted to the success of the telecommunication industry is that it is capital intensive. For example, in 2006-2009, more that $100 billion was invested in the industry by various companies. As a result, there has been a tremendous increase in the number of cell sites. Major players in the US telecommunication market include. ...
Costs and benefits of the merger from AT&T perspective One of the benefits of the merger based on AT&T perspective is that it will create 5,000 new call centers in the US market. In this way, the company depicts that the level of household income will increase as a result of creation of more employment opportunities. In order to indicate that the merger will increase services and reduce prices within the US telecommunication market, the company provided an economic model to the Federal Communications Commission (James 2). AT&T Company aims at displacing Verizon Company in the market. According to the company top level management team, the merger will reduce the congestion experienced in its network. In addition, AT&T argues that the merger will result to the economies of scale. This will be achieved since the company is a large entity and its average cost will be reduced. Other aspects of economies of scale that will emerge include technical and financial economies (Carol 46). In this regard, the profitability of the company will be greatly enhanced since the costs of production will be allocated among many units. In order to ensure growth of the telecommunication market in US, the company management depicts that a significant portion of revenue that will be generated which is estimated to be more than $70 billion, will be allocated to innovation. The improvement of the telecommunication technologies will not only lead to effective communication within the US but also it will generate employment opportunities and foster US economic growth (Berkowitz 25). Additionally, the merger will enable the company to face off international competitors. This will ensure that consumers enjoy quality services with low costs. As a
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“AT&T T-MOBILE MERGER Research Paper Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/macro-microeconomics/1438726-att-t-mobile-merger.
Sprint and T-mobile merger would therefore, make sense to the shareholders in that it would create competition by creating a carrier that effectively and efficiently competes against the two big carriers. There are reasons for Sprint and T-mobile merger
The vision of the company is to attain a sustainable growth rate in the global telecom arena while providing high quality services to its customers all over the world. The brand promise of the company is the belief of the company that life’s happiness depends on sharing with others.
AT&T’s new cell phone will be unique in the sense that it will offer features which are relatively not available in other phones. Considering this fact, this product will be targeted at the customers looking for more mobility while at the same time performing and completing their essential online tasks on the go.
The company claims that it not only develops product lines in congruity with its customer base, but also takes into consideration cultural factors which influence its customer base, and provides adequate support for the services offered (ATT web). The current clientele is divided into the ‘Signature Client Group’ (SCG), in which it has 300 accounts in collaboration with Global multinationals and spends $ 5-10 M (million)in the telecom sector on it, the ‘Premier Client Group’ (PCG), in which it has a stupendous 22K+ (thousand plus) accounts composed of the Enterprise, mid-market and acquisition sectors where the total telecom spend is $ 1M and the small business (SMB) sector, wherein
Introduction In the month of March, 2011, AT&T announced the decision of purchasing T-mobile. Within 5 months the antitrust division of United States Department of Justice announced the standpoint of blocking the takeover and moved to the federal court and the bid was abandoned by AT&T on December in the same year (Goldfarb, 2011).
Introduction The announcement of the merger was made in March, 2011. The antitrust division of United States Department of Justice made itself clear on blocking the merger on antitrust grounds. They moved to the federal court and ultimately in the last month of the same year the merger was finally abandoned by AT&T.
Telephone services in the United States are characterized by a healthy competition between four national operators namely AT&T, T-Mobile, Verizon, and Sprint. Each communication company offers tailored services to their subscribers in accordance to their mission and vision.
T-Mobile also offers wireless Internet access as well as other data services in retail business and airports using its HotSpot brand. The company involves itself with the resell of PDAs, phones, and related accessories from
AT&T has its presence in 225 countries across the globe, and in most of these countries it also provides data roaming and 3g services besides voice plans.
It is worth mentioning here that AT&T’s business also
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