T-Mobile Continues Making Case Against Own Merger with AT&T

There are groups lined up on both sides of the proposed AT&T-Mobile merger/acquistion. Sprint and several high-profile consumer groups oppose the merger and an unexpected collection of groups, including labor unions, support it.

Arguably the strongest argument against the acquisition is being made by T-Mobile itself. Recently the company introduced some new consumer-friendly pricing plans at a time when carriers are largely going in the opposite direction. And the company's new TV campaign highlights the high cost and "gotcha" billing by the major carriers (e.g., AT&T and Verizon). 

The most recent campaign depicts a mobile subscriber being "shaken down" by thugs who are representatives of a major carrier. The commercial dialogue goes like this:

Woman: What's going on over there?

Man: It's just my monthly mugging by my cellphone company . . . brutally expensive."

 Screen shot 2011-06-02 at 5.41.32 AM

It's very hard not to see AT&T as that carrier doing the "mugging" (either AT&T or Verizon is being implied). AT&T is mentioned, along with the other major carriers, at the end of the spot: "Save over $350 vs. AT&T . . . "

It's very difficult for me -- and I'm sure I'm not the only one -- not to see these campaigns as a strong argument against allowing the merger to happen. Clearly AT&T is not interested in maintaining T-Mobile's aggressive pricing and discounting. And by reducing the major players in the US market from four to three, there will be fewer incentives for carriers to compete on price. 

Indeed, AT&T and Verizon essentially don't compete on price. It's Sprint and T-Mobile that have positioned themselves as "value" carriers. AT&T and Verizon talk about their handset selection and the quality of their networks more than their plans and pricing.

I suspect some version of the acquisition (with conditions) will ultimately go through. I find it highly ironic however that probably the strongest arguments against the merger are being vividly laid out in the ad campaigns of would-be "acquiree" T-Mobile.