Investors were thrilled that AT&T Wireless
It's now official -- the nation's No. 2 and No. 3 wireless service providers will combine operations to overtake the No. 1 seat from Verizon Wireless (a subsidiary of Verizon Communications
Apparently, the only serious bidding competition came from Vodafone
Regardless of exactly how the bidding went down, the focus is now on what's ahead: a consolidated wireless market. After years of speculation, the "big six" of wireless are now down to five.
Company | Customers (approx.) |
---|---|
Cingular/AT&T Wireless | 46 million |
Verizon Wireless | 37.5 million |
Sprint PCS |
20 million |
Nextel |
13 million |
T-Mobile |
13 million |
Regulatory approval remains, of course, but most industry experts believe that the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) will give the green light to the deal. With all the complaints surrounding wireless service in the U.S., consolidation is seen as one method to limit those annoying dropped calls due to holes in coverage maps. The FCC has also indicated on several occasions that competition in the U.S. is robust and could withstand fewer competitors.
The mega-deal -- supposedly the largest all-cash transaction in U.S. history -- has also opened up even more speculation about further consolidation in the industry. While Sprint PCS has indicated it's not interested in the merger game, other players are looking at options to build customer bases and reduce costs.
As usual, merger aftershocks are now permeating the market, with speculation rampant about how this first deal will influence other companies. Shares of Nextel, Sprint PCS, and Deutsche Telekom AG all jumped more than 5% higher mid-day on news of the merger.
Motley Fool contributor Dave Mock wonders just what $41 billion in cash looks like. He owns shares of Nextel. Dave is co-author of Tapping into Wireless.