Will AT&T's T-Mobile buy lead to a duopoly?

AT&T's announced acquisition of T-Mobile yesterday continues a decade-long trend of consolidation in the industry and raises questions about whether the industry will inevitably turn into a duopoly.

Provided it passes regulatory muster, AT&T's T-Mobile acquisition will be the fourth major wireless carrier merger in eight years, following in 2004, in 2005, and in 2008. AT&T would become by far the largest wireless carrier in the United States with more than 130 million subscribers.


Combine the current AT&T/T-Mobile subscriber base with those of Verizon (94 million) and Sprint (53 million), and you see that just three carriers would account for 277 million wireless subscriptions. And when you factor in that rumors are already swirling about a new , it becomes easy to see how the entire wireless market could soon come to be dominated by just two or three big players.

As one might expect, many consumer groups are not pleased with this potential development and say that further consolidation would only lead to higher prices for customers.

"A market this concentrated -- where the top four companies already control 90% of the business, and two of them want to merge -- means nothing but higher prices and fewer choices," said S. Derek Turner, the research director for Free Press. "There is nothing about having less competition that will benefit wireless consumers."