Running head: AT$T AND T-MOBILE

The Antitrust Case on AT&T Mobile Merger

Name

Professor

Course

Date
AT$T AND T-MOBILE
AT$T AND T-MOBILE

Examine the major pros and cons of antitrust regulations based upon factors in this case.

Next, argue for or against antitrust policies, and agree or disagree with the antitrust

Merging of AT&T and T mobile would have led to a number of advantages

and disadvantages to the entire United States market. The major pros from this merger would

have been; the merging companies would have gained a large market command to their

products outdoing their close competitors. Secondly, the merger could have expanded their

4G LTE broadband services reaching a large population of United States residents; this could

have seen a benefit to rural areas, which have no broadband connection. Thirdly, the AT$T

could have exploited the T mobile underutilized broadband spectrum to effectively expand on

their 4G services. Lastly, the merger could have created many job opportunities to the

residents because of their expected rapid growth in market (pettinger 2017).

The major cones the merger could have brought to the economy would have

been:

First, the merger would have gained large market share and competing companies

such as Microsoft, Google and Yahoo would have a reduced number of customers to attend to

which could have possible translate to their fall in market thus creating unemployment.

Secondly, since the merger could have commanded a large share in market, it could have

turned into a monopoly company raising the prices of broadband products leading to

consumer exploitation (pettinger 2017).

The Antitrust policies were formulate to protect consumers from business

malpractices in economy. The policies also ensures that there is free competition in the

economy and steady flow of goods and services into the market. The antitrust policies also

saved the US economy from predatory business that could have led to poor products in the

market resulting from monopolies (enotes 2018).

The antitrust authorities decision on ban of AT$T mobile merger really helped

to solve problems that could have befallen the US wireless market. Absence of free

competition between a merge and other companies providing the same services would have

been observed leading to poor products and services in market. Secondly, the prices would

have likely to be higher resulting from one Monopolist Company commanding a substantial

number of customers in market fixing its own prices. Another outcome could have been the

reduced quality of services and products. Finally, innovation could have been eliminated in

market lowering the variety of products provide because of low or complete absence of

competition

Assess the strategic fit of the AT&T and T-Mobile merger. Provide a rationale for your

response, citing elements of the Resource-based framework.

The merger between AT$T and T-Mobile strategically fits, the merger would

have achieved the competitive advantages in US wireless market and sustain it for a

prolonged period. Looking at AT$T company, it had good network and well established

innovative and skilled research team though it lacked a wide broadband spectrum. As for

T-Mobile, it has no aggressive management and established researchers though it had a

wide broadband spectrum the two really have a mutual fit and one could have provided a

solution to on others shortcomings as reported in (Economist 2018).

The merger would have been successful as the AT$T will been able to get the

spectrum they need. This would have enabled them to expand on their production and

pursue a large penetration into the market. AT$ T could as well reduce its expenditure in

building infrastructure as it uses the already available spectrum of T-Mobile. On another

hand, T-Mobile would have access to more customers and exposed to advanced skills as
AT$T AND T-MOBILE

well as its getting its underutilized resources put to maximum use thus eliciting the

maximum profit from its operations (Economist 2018).

Analyze the organizational fit of AT&T and T-Mobile. Predict whether or not the post-

merger organization will be a success or a failure. Justify your response

The fit between AT$T and T-Mobile companies is resource driven as AT$T

looks into T-Mobile as a good source niche their need for broadband spectrum, T-Mobile also

looks into AT$T as a good chance to utilize its largely available spectrum. After merging, the

companies will face various challenges in management since the two companies had already

established strength in market and have different cultures in management as documente in

(Lubatkin, 2013.pp 43-57).

Due to difference in operational cultures of these two companies, a failure will

come in following acquisition, as one company will be forced to remain submissive to

another. Every company management staff members will yearn to retain their initial positions

and embrace the culture in which they were handling task assigned and will not cooperate

with the new roles and rules created during the merger since both companies were competing

for the same customers earlier before the merger.

References

If AT&T had merged with T-Mobile, would the merger have violated antitrust laws? Why or

why not? (n.d.). (2018). Retrieved from https://www.enotes.com/homework-help/a-t-

and-t-had-merged-with-t-mobile-antitrust-laws-481542

Lubatkin, M. (2013). Merger strategies and stockholder value. In Mergers & Acquisitions

(pp. 43-57). Routledge.

Pettinger, T. (n.d.) (2017). Pros and Cons of Mergers. Retrieved from

https://www.economicshelp.org/blog/5009/economics/pros-and-cons-of-mergers/

World News, Politics, Economics, Business & Finance. (n.d.) (2018). Retrieved from

https://www.economist.com/