Thursday, June 5, 2008

Yet another Telco Takeover in the Works

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High prices and limited choice of cell phone providers has been the tune that Canadian consumers have heard for years. But sooner rather than later American cell phone subscribers will be hearing to too. Verizon communications announces a 28 billion dollar plan to acquire Alltel Wireless. This takeover is going to be sold to the FCC and the FTC as providing better service through better coverage for Verizon Wireless subscribers in mid-western and southern states, this takeover will still mean less competition for the American consumer.

This proposed takeover will leave Sprint Nextel and T-Mobile as the last major cellular only carriers in the American marketplace, which itself has speculated as the next potential takeover targets. There has been talk already that companies will merge in order to avoid getting swallowed up by AT&T or Verizon. Such a merger will ultimately mean that subscribers will lose out simply by having subscribers on one of the carriers would have to get new phones. With T-Mobile using GSM and Sprint Nextel using both CDMA and iDen technologies, there is no way that the merged company will let all three technologies co-exist.

Are we headed to a single telco? Does this mean the return of Ma Bell? Just wait and see.

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