Economist Mike Walden: Phone Company Shakeups

I’m Mary Walden, with economist MW, welcoming you to the economic perspective.   Today’s program looks at phone company shakeups.  Mike, the national wireless phone carriers have settled down to four major members: Verizon, AT&T, T-Mobile, and Sprint.  This is many fewer than there were just ten years ago.  Are there plans for further consolidation, and if so, what are the issues?

Yes, there is a pending merger between T-Mobile and Sprint, which would leave three companies of close to the same size in terms of subscriptions

Companies wanting to merge usually argue they can be more effective competitors, especially if they are the smaller companies, which Spring and T-Mobile are

But any merger will have to be approved by a federal judge

Research has found there are pluses and minuses – from a consumer point of view – from these kinds of mergers

On plus side, can result in more investments and an upgrading of service and capabilities

On the negative side, prices to customers usually rise

Interesting to watch

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.