Monday, March 21, 2011
Consumers May Find L
Consumers May Find Little to Cheer in AT&T Deal
If approved by regulators, the merger would leave just three major cellular carriers in the United States, a development that consumer advocates warn could eventually lead to higher prices for a wide variety of services. For this reason the deal is likely to attract close scrutiny in Washington.
It is too early to say how much — or even whether — rates might rise for consumers, who on average pay $55 a month for their wireless plans, said Roger Entner, who tracks the wireless industry for the Nielsen Company. But while consumers may see some immediate benefits — in network quality, for example — they are not likely to benefit in the long run, some analysts and industry experts said.
The bottom line, they said, is that competition is likely to suffer, leading to higher prices and less innovation. That is because the deal would leave just AT&T, Verizon Wireless and the much smaller Sprint to divide up the voracious smartphone market — with the AT&T and T-Mobile union likely to dominate the market.
“Without some of the smaller competitors, you won’t have the competitive pressure that leads to lower prices and innovations and offerings among the carriers,” said Paul Reynolds, electronics editor at Consumer Reports.
AT&T maintains that the merger will be good for consumers.
“The benefits of this transaction are possible at this scale and on this timeline only from the combination of these two companies,” Randall L. Stephenson, chairman and president of AT&T, said in a call to investors and analysts on Monday. He added that the merger “will improve network quality” and “give more customers access to more services.”
Other analysts also had a rosier view, suggesting that AT&T may diversify its offerings if it acquires T-Mobile. T-Mobile has long built its reputation by offering affordable, low-rate cellphone plans, including ones that do not require annual contracts or a minimum voice plan.
“Having 30 million new subscribers might convince them to add more attractive data pricing,” said Chetan Sharma, an independent wireless analyst, referring to T-Mobile’s customer base. “Things like data family plans could become a reality.”
Whatever happens to prices, the availability of cellphone coverage in the United States is likely to expand, analysts said. AT&T and T-Mobile have invested in different parts of the country, and customers of the two companies would have access to a larger, combined network. Potentially, the acquisition of T-Mobile, with its additional wireless spectrum, could also help AT&T with the rollout of its next-generation wireless network, known as 4G.
Improved service and network quality could be another boon. T-Mobile and AT&T use the same underlying GSM cellphone technology, which should reduce any friction of blending the two networks. AT&T could take advantage of T-Mobile’s latest high-speed network, in which the company has invested millions to upgrade and bring online. By adding T-Mobile, AT&T will gain cell sites equivalent to the number it would have taken five years to build, experts say. All this means, in theory at least, that service should improve. But the cost to buy that coverage is likely to go up.
“Typically, the more competition there is, the faster prices drop,” Mr. Sharma said. “In a situation where there are two main carriers, pricing is not likely to move as much.”
One burning question raised by the potential of a merger with AT&T is what will happen to the wide range of inventive T-Mobile data plans, which are some of the lowest in the country, and have helped keep pressure on competitors. The company also offers a wider choice of smartphones for younger users, like the popular Sidekick line, which T-Mobile recently said it would revive.
AT&T is expected to honor contracts through their expirations, but it is unclear what will happen once those contracts expire.
“The prospect of having those kinds of options go away is a real concern,” said Mr. Reynolds of Consumer Reports. “It’s a welcome offering for people in this market that can be quite unaffordable otherwise.”
If approved, the merger is expected to save both companies $3 billion annually. That saving, Mr. Sharma said, along with the influx of millions of new consumers, might persuade the company to be more competitive in family data plans as a way to draw in new subscribers and increase competition with Verizon, the new company’s chief rival. If the merger is approved, AT&T would have about 129 million wireless customers and Verizon about 101 million. Sprint has about 50 million customers.
Another potential byproduct could be a drop in pricing for sleek, high-end smartphones. Hardware makers, for example, might offer AT&T a lower rate for bulk purchases of new smartphones and tablet computers.
“AT&T’s new scale would give them pricing advantage,” Mr. Sharma said. “You could end up seeing $100 or $150 smartphones for consumers in the future.” A typical smartphone can cost $200 with a contract. One constant in a consumer’s life could remain: frustrating experiences with customer service.
“In terms of customer satisfaction, AT&T was clearly in last place, below average in comparison to other carriers, including T-Mobile,” he said.
Although T-Mobile has historically performed well in the annual surveys conducted by Consumer Reports that rate satisfaction, in big takeovers the larger company typically tends to swallow the smaller one, he said.
“The overall consumer experience might become more like AT&T than T-Mobile,” Mr. Sharma said.
Home sales dive, pri
BBC News – Syria u
Reports: Pelosi hosp
Reports: Pelosi hospitalized in Italy - On Politics: Covering the US Congress, Governors, and the 2010 Election - USATODAY.com
House Minority Leader Nancy Pelosi, D-Calif., was hospitalized today in Rome, the Italian news agency ANSA said.
BBC News - Syria unrest: Thousands march in Deraa
Thousands of demonstrators have marched through the southern Syrian city of Deraa calling for greater freedoms.
The march follows the funeral of a man killed on Sunday, when security forces opened fire on protesters.
Big Love Series-Fina
The Rise and Fall of
Big Love Series-Finale Recap: Good-bye to All That -- Vulture
Big Love concluded its five-season run last night, with a bang and then a whimper. The closing moments of the show addressed pretty much every plot thread from the last season, but in a way so pat it took some of the fun out of the finale. Heather married Ben in spite of his naming a star after her. Barb leads the church, Sarah returns to have her baby blessed, and that pixie Margene takes off for yet another medical-relief cruise. So, yay, for the Henricksons.
The Rise and Fall of Telephone Competition: 1982-2011 - PCWorld
So much for quiet Sundays. AT&T announced today that it's agreed to acquire T-Mobile US from Deutsche Telekom, a merger which, if completed, will make it by far the country's biggest wireless phone company. It'll also leave us with three national carriers: AT&T, archrival Verizon Wireless, and the much smaller Sprint.
Sprint Left Scrambli
Texas Boys Discover
Sprint Customers Can
Sprint Customers Can Use Current Number For Google Voice - WSJ.com
Sprint Nextel Corp. (S) will offer Google Inc.'s (GOOG) Google Voice on all Sprint phones, and it will allow customers to use their existing Sprint wireless phone number.
Google Voice, a phone forwarding and voicemail service, allows users to make and receive calls between their computers and phones after they install a voice and video software plug-in.
Sprint said it is the only carrier to allow the use of their existing mobile phone number without paying porting fees.
This spring, Sprint will begin selling the Nexus S 4G phone from Samsung Electronics Co. Ltd. (SSNHY, 005930.SE), and it will come preloaded with the Google Voice Android appplication.
Texas Boys Discover 'Fossil Gold Mine' - FoxNews.com
SHERMAN, Texas – For Andrew Carroll and Thomas Smith, two North Texas sixth-graders, the adventure began when they found a bone while exploring a creek southeast of Sherman.
"We all got excited because I knew it was too big to be a cow bone, so we knew it was a dinosaur bone," Andrew said of himself and his Pottsboro Middle School classmate.
Sprint Left Scrambling For Options After AT&T Deal For T-Mobile - WSJ.com
NEW YORK (Dow Jones)--The combination between AT&T Inc. (T) and T-Mobile USA leaves Sprint Nextel Corp. (S) even further behind in the dust.
The surprising deal widens the gap between Sprint and its two larger rivals, and would place it last among the national wireless carriers. It also puts Sprint in an awkward position--it too was in talks to merge its operations with T-Mobile, with AT&T essentially snatching up Sprint's best means to make up ground.
"This will certainly make Sprint's life more difficult," said Roger Entner, a consultant with Recon Analytics.
Sprint shares, which have gained 19% this year through Friday's close, tumbled 13% to $4.39 Monday morning in premarket trading.
Sprint may need to turn to an acquirer of its own. Cable provider Comcast Corp. (CMCSK, CMCSA), whose market cap is more than three times the size of Sprint, could be a potential suitor. Cable companies are seen needing to expand the mobile services they offer, just as wireless providers, such as AT&T and Verizon, have ramped up their video offerings in recent years.
Twitter celebrates its fifth birthday
Five short years since it started, Twitter has become part of the fabric of society for tens of millions of users who regularly tweet about their lives and experiences in no more than 140 characters.
And it all started on 21 March 21, 2006 with the brief and banal tweet sent by co-founder Jack Dorsey.
That first tweet simply read: "just setting up my twttr".
America's Fragile Recovery | Politeia | Big Think
Recently I wrote about a McKinsey Global Institute study that found the American economy is likely to stay slow in the long term as a larger percentage of its population leaves the workforce and retires. While the economy has begun growing again and the unemployment rate has finally come down below 9%, the American economy’s short-term prospects also aren’t very good.
Oil jumps to $103 as allied coalition bombs Libya: Associated Press Business News - MSN Money
(AP) - Oil prices jumped to above $103 a barrel on Monday after Libyan leader Moammar Gadhafi vowed a "long war" amid a second night of allied military strikes on the OPEC nation.
A coalition of the U.S., France, U.K. and other nations bombed tanks and anti-aircraft sites Sunday and deterred Libyan fighter jets from flying. Gadhafi said he would not resign and pledged to continue to attack the eastern rebel stronghold of Benghazi.
Fierce fighting during the last month has already shut down most of Libya's 1.6 million barrels per day of crude output. Investors are now concerned international intervention could extend the conflict and keep Libya's oil production out of the market longer than perviously estimated.
"The regime in Tripoli shows no sign of giving up," Capital Economics said in a report. "The prolonged loss of Libyan oil could push prices all the way up to the highs above $140 seen in 2008."
Gadhafi also warned that Western powers would not get Libya's oil, suggesting his forces may sabotage crude installations. Some traders worry a cornered Gadhafi could lash out in a last stand that disrupts regional tanker shipments.
"A 'scorched earth' response from Gadhafi could cause disruptions to ships traveling the Mediterranean," energy consultant The Schork Report said.
By early afternoon in Europe, benchmark crude for April delivery was up $2.12 to $103.19 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents to settle at $101.07 per barrel on Friday.
In London, the May contract for Brent crude was up $2.14 at $116.07 a barrel on the ICE futures exchange.
While equity markets were boosted Monday by hopes that Japan was making progress in bringing under control radiation leaks at its Fukushima nuclear power plant, analysts said concerns about lower energy demand from the world's third-largest economy would keep a ceiling over oil prices.
"The Japanese nuclear disaster seems to be coming to a close at an excruciatingly slow pace, meaning that the Japanese economic recovery will likely be slow and torturous," said Edward Meir at MF Global in New York, adding that the situation "will continue to exert a drag on energy prices."
In other Nymex trading for April contracts, heating oil was up 4.45 cents at $3.0688 a gallon and gasoline added 5.41 cents to $3.0035 a gallon. Natural gas gained 4.1 cents at $4.209 per 1,000 cubic feet.
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Alex Kennedy in Singapore contributed to this report.
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