AT&T: Blocked T-Mobile deal will lead to higher prices

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AT&T’s Randall Stephenson said that customers can expect wireless service prices to go up thanks to the feds’ blocking of the $36 billion T-Mobile deal.

It all boils down to bandwidth, or lack thereof. He said one of the major reasons it was trying to buy T-Mobile was to get more wireless spectrum and without that, it won’t be able to offer advanced services at the same prices it is currently offering. He also said that having more competition in the wireless space actually leads to higher prices.

“The more competitors you have, the less efficient the allocation of spectrum will be,” Stephenson said, according to the Wall Street Journal. “It’s got to change. I don’t think the market’s going to accommodate the number of competitors there are in the landscape.”

The government didn’t seem to agree, as one of the reasons it blocked the deal was because it felt like the lack of competition would actually hurt users because when you have less options to choose from, you’re more exposed to the whims of those companies. I think AT&T has a legitimate point about the “spectrum crunch” but that doesn’t mean consumers will be happy with price hikes.

[Via Wall Street Journal]

  • http://twitter.com/Danerisms Dan

    AT&T may have a point about spectrum crunch, but that should inspire innovation and build of new technology to more efficiently handle spectrum. As for the greater competition equals higher prices, I would like to see one modern economics example of this. Competition means competing for the customer base and that means better deals for customers. I think Randall Stephenson must have slept through his economics classes. AT&T has been doing less than reputable business deals for years. Anyone remember when you had to have a home phone to have DSL? That was never a technical requirement. DSL could run on “dry pair”. They do it all the time now, but for 5+ years they were able to up charge everyone for a phone line… But according to Stephenson if there would have been more competition in the DSL market… AT&T would have charged even more? 

  • http://twitter.com/snidely1459 Snidely

    Don’t know how he could keep a straight face while saying that.  They just won’t let this go.  Hey AT&T! You lost! Get over it.

  • http://www.facebook.com/people/Mike-Smith/515882925 Mike Smith

    RANDALL IS TRYING TO RECOUP THAT 8 BILLION THEY HAD TO PAY T-MOBILE…THIS COMPANY IS EVEIL AND I AM SO GLAD I DONT USE THEM AS MY CARRIER.

  • Mfred

    Randall is 100% Right ON    govt controls & restricts the Supply of the needed resource & all the while Demand goes up.  The only thing that can happen is to usage must be constrained by pricing.    No Supply+ Increased Demand= Higher Prices   

  • Steve

    This is the biggestlie I’ve read so far today.  This Randall Stephenson sounds like a royal bastard.

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