T-Mobile customers worry over AT&T takeover

This photo combination shows logos for AT&T, left, and Deutsche Telekom AG. AT&T Inc. on Sunday, March 20, 2011 said it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion, becoming the largest cellphone company in the U.S. ((AP Photo))

March 21, 2011 5:26:04 PM PDT
AT&T plans to buy T-Mobile for $39 billion -- if approved by federal regulators, it would be the largest cell phone company in America.

And that could mean higher prices for consumers.

Most analysts and consumers we talked to believe it's only a matter of time before the combined company would raise rates.

However, AT&T says prices could actually go down. They cite a study that shows cell phone bills have dropped over the last decade when several large telecom companies merged.

The T-Mobile store in the South Loop sits right next door to an AT&T store.

By next year at this time, however, the two may shrink to one store as AT&T, the nation's second largest carrier, gobbles up T-Mobile, the fourth largest carrier.

The new AT&T would then overtake Verizon to become, by far, the dominant cell phone company. That concerns some T-Mobile customers who worry they may be looking at higher rates.

"I'm a little afraid the prices might go up because I don't know a lot of people who have AT&T at this point, and I heard their packages are a little more expensive," said T-Mobile customer Kimberly Allen.

"I'm not happy because I'm really worried about rates going up," said T-Mobile customer Levi Hicks.

Analysts say the deal would allow AT&T to improve performance in some areas because they would have more cell towers available.

An AT&T spokesperson also maintains the deal would increase competition and lower prices.

"I have a home phone with AT&T and I'm satisfied, and I'm satisfied with T-Mobile too," said customer Olga Bitmar.

Experts say T-Mobile tends to offer less expensive rates but also less sophisticated phones as opposed to AT&T. which tends to have higher rate plans but also offers more high-tech phones.

Executive Director of the Citizens Utility Board David Kolata says fewer companies generally means less competition and higher prices for consumers.

"What you're talking about is a tremendous consolidation in an industry that's already heavilyconcentrated. Ultimately, you want to make sure there's a competitive marketplac,e so we get the offers we want and prices are reasonable," Kolata said.

Kolata says he hopes regulators will look at the deal closely before they decide whether to approve it.

Some customers hope for even stronger action.

"Whatever happened to anti-trust laws as a consumer, we really have very few choices. Of course they're going to raise prices," said T-Mobile customer Mary Cathering Burch.

Experts say it will likely take at about a year before regulators approve the proposed deal.

In the meantime, they say it is possible Verizon may now look at possible mergers with smaller companies such as U.S. Cellular.