Legal battle looms between wireless giants, but fate of consumers remains unclear.
Greater access to the wireless spectrum is fueling AT&T’s desire to acquire T-Mobile USA, a move that would allow AT&T to launch its 4G network nationwide.
The merger, a marriage that would create the biggest wireless carrier in the United States, is meeting with strong objections. Sprint Nextel Corp., the nation’s third-largest carrier, filed an antitrust lawsuit in federal court yesterday claiming the merger would create a duopoly that marginalized Sprint and harmed consumers, Bloomberg News reports.
The U.S. Justice Department filed its own suit last week against AT&T and T-Mobile’s parent company, Deutsche Telekom AG. The suit claims the merger would substantially reduce competition in a market, now dominated by Verizon with 34.3 percent of the market share and AT&T, who has second-largest share of 31.7 percent. Sprint is a distant third with a 15.5 percent share, and T-mobile has 11.6 percent of the market, according to CNNMoney.
The Justice Department suit is seen as a major obstacle to the merger, which must take place for AT&T to avoid a $3 billion reverse termination fee to T-Mobile. Also at stake is several billion dollars in wireless spectrum allotments, according to CNNMoney.
AT&T claims the merger would allow the company to expand its 4G LTE (Long Term Evolution) service to 95 percent of the U.S. population, reaching an additional 46.5 million Americans beyond current plans. The plan supports Obama administration goals to connect all of America - even rural communities - to the digital age, said AT&T in a press release explaining its reasons for buying T-mobile.
The likely legal battle over the merger points to fierce competition for wireless spectrum, one that has intensified with the development of the faster 4G networks. “In the long term,” said the AT&T release, “the entire industry will need additional spectrum to address the explosive growth in demand for mobile broadband.”
Demand for smartphones is firmly established among Millionaire investors, who represent 8 million U.S. households, according to Millionaire Corner research. Use of wireless technologies is expected to grow exponentially with coming generations, but even now 43 percent of Millionaires own smartphones. The share grows to 70 percent for Millionaires ages 54 and younger.
Millionaires use their phones for work as well as play. While 10 percent take in the news via smartphones and 5 percent use the mobile devices to play games, about 56 percent use their smartphones to access accounts, 45 percent, to conduct financial research, 35 percent to pay bills and 26 percent to trade investments.