Verizon's chief executive Lowell McAdam has publicly stated that the merger between AT&T and T-mobile should allowed.That's quite a shocker, isn't it? I mean why would Verizon support their biggest rival and help them become even bigger than them with more subscribers? But that's exactly the question everyone, including the Government, should be asking themselves. Why?
Verizon isn't supporting the merger out of the goodness of their own hearts. They wouldn't do this unless they really believed it would end up benefiting them in the long-term. And that's exactly what's going to happen if AT&T buys one of the 4 large carriers, and the competition becomes reduced to only 3 competitors. Then, when only 3 competitors are left, not only do Verizon and AT&T get to keep their high prices for everything, but they also get to add new charges, or cap data further and so on.
If you look at the recent changes, whatever move AT&T did first to the detriment of their customers, Verizon followed them. They doubled the cancellation fee for iPhones before Verizon got it, and then Verizon did the same. Then AT&T also introduced data caps, killing unlimited data plans unless you were grandfathered in, and soon Verizon did the same. Recently, AT&T introduced throttling of data for the heaviest 5% users. Verizon has just announced they will be doing the same.
If all of this is happening now with 4 carriers as competitors, imagine what will happen when there will be only 3. Prices should be going downwards, not upwards. US needs more carrier competition to make that a reality, not less.
But shouldn't less competition help Sprint, too? Why is Sprint against the merger? Not exactly. Sprint would become a much weaker player if the merger goes through. The 2 largest carriers, Verizon and AT&T, would first try to squeeze them out of the market, by offering much better deals than Sprint in the short-term, until Sprint would have to sell itself, probably to Verizon. Then once the duopoly is established between the two, they'll be free to raise price as much as they want, almost in the same time.
Sprint has been wanting to buy T-mobile for a while now, and today the Sprint CEO even suggested that they would still like to buy T-mobile, but probably not for the enormous amount of $39 billion that AT&T wants to pay for it. If Sprint ended up merging with T-mobile, they would become almost as big as Verizon and AT&T, and while I still believe there should be more competitors not fewer, in worst case scenario, it would be best if Verizon and AT&T had a stronger competitor that would come out from the merger of Sprint and T-mobile.