An Economic Analysis of the AT&T-T-Mobile USA Wireless Merger

35 Pages Posted: 25 Apr 2012  

Stanley M. Besen

Charles River Associates (CRA)

Stephen Kletter

Charles River Associates (CRA)

Serge Moresi

Charles River Associates (CRA)

Steven C. Salop

Georgetown University Law Center

John Woodbury

Charles River Associates (CRA)

Date Written: April 19, 2012

Abstract

On March 20, 2011, wireless provider AT&T announced its intention to merge with T-Mobile USA, a competing wireless provider. This article reviews the economic analysis of this proposed acquisition that we carried out for Sprint and explains why the merger would have been anticompetitive. We analyze how the merger would have led to adverse unilateral, coordinated and exclusionary effects. AT&T and T-Mobile contended that their proposed merger would not adversely affect competition in wireless services because T-Mobile USA was not an effective rival, because other wireless providers could easily replace any competition that was lost as a result of the merger, and because the efficiencies from the merger would be so substantial that they would dwarf any perceived anticompetitive effects. Our analysis concludes that AT&T failed to provide convincing evidence of the lack of anticompetitive effects and failed to adequately document the claimed efficiencies in a manner consistent with the Horizontal Merger Guidelines.

Keywords: mergers, antitrust, telecommunications

JEL Classification: L00, L1, L4

Suggested Citation

Besen, Stanley M. and Kletter, Stephen and Moresi, Serge and Salop, Steven C. and Woodbury, John, An Economic Analysis of the AT&T-T-Mobile USA Wireless Merger (April 19, 2012). Available at SSRN: https://ssrn.com/abstract=2045713 or http://dx.doi.org/10.2139/ssrn.2045713

Stanley M. Besen (Contact Author)

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

Stephen Kletter

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

Serge Moresi

Charles River Associates (CRA) ( email )

1201 F Street, NW
Suite 700
Washington, DC 20004
United States
(202)662-3847 (Phone)

Steven C. Salop

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9095 (Phone)
202-662-9497 (Fax)

John Woodbury

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

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