AT&T CEO Warns of Higher Prices in Wake of T-Mobile Failure

[Doolie]

If AT&T, or AT&T and one other competitor had most all the widgets available for sale, then they together would have pricing power and could price the widgets as high as they wanted to. It there were lots of competitors with lots of widgets to sell, they would not have pricing power and prices would fall as each fought for their piece of the marketplace.

What AT&T is crying about is their costs are increasing, and they lack the pricing power they could have had if T-Mobile wasn't around.

It is supply AND competition that controls prices, not just supply alone.



Competition grows to service markets. If no one wants to buy, there is no market,

Maybe that's the way things should work. Though, because something exists, there is a market, take for example, the "Edsel". There are markets for all kinds of things people don't desire or have interest in. That's where the art and science of human persuasion comes in, to persuade people to buy, to generate want, to show benefits of ownership. Markets aren't concrete. They are subjective, because people's tastes and desires are capable of change.

[zentec]

Would you explain this "collusion"? Or better, the whole paragraph.

More often than not, handsets are sold subsidized through the carriers themselves or the carriers authorized sales chain. The manufacturers have no incentives to sell them on the open market because they'd rather accept a nearly guaranteed thin margin and a minimum sales level.

Reduced risk for the manufacturers, carriers still maintain a lot of control over their market.

Imagine the outrage if the cable TV company required you to purchase a TV from them, at a minimum commitment level or if you roll your own the price at a retailer was kept unnecessarily high because the suggested retail price was pretty much dictated by the cable company.

[jet1000]

Again, that you call them opinions, is just your opinion. You are not the finder of facts in this case. The Federal agencies don't call them that, they call them "findings" and apparently you have no respect for their process.

It has nothing to do with my "respect" of their process. The word fact doesn't apply to future events. Let's look at the definition of fact from dictionary.com:

1. something that actually exists; reality; truth: Your fears have no basis in fact.

2. something known to exist or to have happened: Space travel is now a fact.


So facts can be for current truths or past truths. There is no definition of fact for future events. So I correctly labeled the government's opinion of what would happen as their speculation. They don't have a crystal ball anymore than anyone else. You know they can't predict the future with 100% accuracy. So don't try to say that they can.

I suggest that AT&T look to the FCC who handles the allocation of the public's airwaves. Its their store. Unbelievable that you don't know that. There is a process for obtaining additional bandwidth via the same Federal government you seem to disagree with.

That's exactly what AT&T did. Knowing that the FCC wouldn't soon auction off any new spectrum to compete with Verizon's nationwide 700 MHz, C block, AT&T did the next best thing which was to try and acquire T-Mobile's spectrum to cobble together 700 and AWS licenses in order to compete. The government upheld Verizon's LTE monopoly by opposing the acquisition.

Again, you're the one saying how bad monopolies are, yet you oppose the very action which would have combat an existing one. How contradictory is that? And when asked for an alternative to combat it, you have presented none. Because there is no alternative.

Of course a company is better off with less competition than more. Its the CONSUMER that gets it in the shorts when faced with a lack of competition.

So why is it that you support Verizon being the only LTE provider to 20% of the country again? I'm not following your logic. steveanderson13 wants evidence on why having Verizon as the single LTE provider for millions of people is bad for the consumer. Perhaps he can read the references that you have cited. I'm not going to repeat what you've already said.

[BuffaloTF]

Prices have declined, that $7 phone bill perhaps didn't include any phone calls. In some markets including NYC you were charged even for local calling. Now most people long distance and many other services bundled for about the same inflation adjusted price.

The government should encourage competition.



Now I have the choice of getting "dial tone" from my local exchange carrier (in my case Verizon, formerly General Telephone), the cable company, several competitive local exchange carriers, and numerous internet VOIP providers. I don't even need dial tone if I want to strictly use mobile services from one of four carriers, or a choice of resellers. Choices I didn't have under regulation.

Even so, AT&T has slowly reconstituted itself into the "New AT&T." And facing competition from several fronts for most all of its businesses. Competition is good for the consumer.

That is a NYC phone bill, and it includes $4 worth of local call credits. 10 cents per minute after.

Telephone rental was $1.18 in 1980. In 1988 it was $6.98. By 1988, you could easily by a 4-prong telephone in any store. That's competition. The price went up.

The cost of competition on copper telephone line service skyrocketed after the breakup of AT&T. There's an example of it on every single fee and charge that exists on phone bills, and new ones fabricated from thin air after the breakup.

Competition was naturally created in other business sectors. Breaking up AT&T's monopoly on copper was not required for cable companies to enter the internet world... for MCI or Sprint to exist and sell long distance rates on AT&Ts lines, ISDN lines, and a few years later, over the fancy fiber optic lines that were being created. MCI and Sprint called shenanigans, but they were still succeeding to a great degree - it didn't matter that you had to call them first toll-free, then dial your number. They were raking in the money. They were just being greedy, and it cost Americans dearly -- as shown in the examples above. How lucrative was long distance? Here's a fun line from 1997, regarding 7.5 cent per minute charges...

"Long distance is still the most profitable business in America, next to importing illegal cocaine."

I think that says it all what the true motives were for these companies. They weren't in it because "competition is good" for the consumer and would save you money. They were in it to enrich themselves. Your phone bill now costs more than it would have. And the internet would have made your long distance rates free by taking the traffic off of the copper and circuits and moving it to the web - causing the copper owner to react the same way... by offering free long-distance themselves. The technological advancements Bell Labs was making ground to a screeching halt. These companies don't have the overhead anymore to spend money on researching things that may fail - and incrementally improve things, instead of do things that revolutionize industries.

[Antenna]

Wrong again. T-Mobile didn't and doesn't compete with AT&T. They compete with Verizon. The better Verizon and AT&T can compete with each other, the better the coverage and service are going to be, and they are at a deadlock for raising prices, so prices will stay stagnant anyways.

ATT is more expensive had yeilds less LTE coverage than Verizon. $30 gets you only 3gb on ATT , while it gets you 4 on Verizon

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[MasonDoctorJT]

[QUOTE=BuffaloTF;14800569]It would only be $27.84, actually. (http://www.bls.gov/data/inflation_calculator.htm) And 10 dollars is an expensive bill. That's still a 100% increase following the breakup of AT&T to where we are today -- so I don't see where we're going that it's a flawed argument. I accounted for inflation. And I even added in some instances of dialing directory assistance and making a long-distance call. Phone service itself was only $7.63 a month, and that includes all taxes -- and by 1980, you didn't need to rent the device from Ma Bell.

And again, POTS service costs 50 dollars today, bare minimum - unless you get a lifeline and can't make outbound calls with it. The same copper that AT&T strung through all of North America is still used, if you want it. Your 14.99 offers come from VOIP and cable companies, which use the internet. A totally different industry that was not created by breaking up AT&T. An industry that, legally, AT&T was not allowed to play in prior to their breakup. And everything Bell Labs created that wasn't telephone related, they could not sell. Following the breakup, they owned it all -- or the spin-offs did. What was once free, from then on had a cost.

/QUOTE]
No, my $14.99 is AT&T, and your inflation site disagrees with mine, either way, I'm not sure where you live, but if you're paying $50 around here in Ohio, you get nationwide unlimited long distance, and all the other features included. Which in 1980 means it would've cost $14. Or by you're calculations $18.52. I don't know about you, but back then if used any long distance at all the Bill would've broken $25 easy. All I'm saying is that the competition didn't make things worse.


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[billm261]

Wrong again. T-Mobile didn't and doesn't compete with AT&T. They compete with Verizon. The better Verizon and AT&T can compete with each other, the better the coverage and service are going to be, and they are at a deadlock for raising prices, so prices will stay stagnant anyways.

No, your wrong again.

As defined by Websters:
"the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms"

Verizon, AT&T, Sprint, T-Mobile, US Cellular, etc etc all compete for the customer that has the ability to choose any of the carriers if (and only if) it works for them.

For someone that lives in SE Florida for example and maybe vacations in Las Vegas, New Orleans, So. Cal and what not, all the carriers (including little Metro PCS) have a chance to get that customers money. They are all competing for (and want) that dollar.

They do not and can not compete for the customer that is unable to use them due to coverage requirements like needing coverage in Booneyville Idaho, Preston CT or in T-Mobiles case, demands an iPhone. In that case, there is no competition at all.

[GSMinCT]

ATT is more expensive had yeilds less LTE coverage than Verizon. $30 gets you only 3gb on ATT , while it gets you 4 on Verizon

AT&T has M2AM, Rollover, 3GB instead of 2 on the iPhone, a much faster iPhone, more Faux G coverage than Verizon has 4G, more bars in more places, etc etc. Not saying they are the be-all-end-all to cell phones, they're not, but they do have some advantages over Verizon. To me the biggest is not worrying about minutes. I have basically unlimited with Rollover. AT&T also has the best coverage in some areas, like mine, and LTE in some areas Verizon doesn't, like mine.

No, your wrong again.

As defined by Websters:
"the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms"

You can broaden the sense, and that's fine, but they don't directly compete. Once you have Verizon competing with MetroPCS, it's not that much farther of a jump to have cell phones competing with two-way radios, VOIP, landlines, car GPSes, satellite radio, etc etc. At some level, yes, there is competition for the consumer's dollar across systems and technologies that aren't in the same class of service.

[Steveanderson13]

At some level, yes, there is competition for the consumer's dollar across systems and technologies that aren't in the same class of service.

Well, Thank you. And there's competition That isn't across systems. Most people require coverage. Most people require a phone. That covers a lot of people. This would even include prepaid. Any companies that offer this are competitors As evidenced by the definition given above.

Spoken from my motorola byonics using google voice

[spdickey]

It has nothing to do with my "respect" of their process. The word fact doesn't apply to future events. Let's look at the definition of fact from dictionary.com:

Again, what you only state is your opinion. By your ignorance of the process, you prove your disrespect. I called what the courts do is to be a finder of facts, and since AT&T withdrew, the hearing was never held. Now lets look at what facts we have.

The prediction of future events is not done via the opinion process, because opinions are subjective, rather it is done through an objective process called forecasting. "Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed." Wikipedia.

If the government hold that it believes in its forecasts, then the fact is, someone else has to disprove those forecasts. And AT&T decided not to disprove through the hearing process the forecasts made by the various governmental agencies. Creating an opinion is not what the Feds did, they created a forecast. One which was not challenged by AT&T. So the fact is, forecasts seemingly are accurate enough to make AT&T believe that it wouldn't be allowed to swallow up T-Mobile. And the fact is, they haven't.

If you want to be schooled in the art of forecasting, see http://en.wikipedia.org/wiki/Forecasting

So why is it that you support Verizon being the only LTE provider to 20% of the country again? I'm not following your logic. steveanderson13 wants evidence on why having Verizon as the single LTE provider for millions of people is bad for the consumer. Perhaps he can read the references that you have cited. I'm not going to repeat what you've already said.

I don't, I never did, and I never said that. And I resent you putting words in my mouth. Please provide the evidence that I ever said "you support Verizon being the only LTE provider to 20% of the country." Never said that, never will. You again have lied and fabricated statements I never made.

AT&T is working even today at building out their LTE network, I hope they succeed along with anyone else who will compete with AT&T.

[dalbrich]

Be calm don't worry. There's no price hike coming. AT&T is in a lock-step price-wise with the competition. If they raise prices and say Verizon does not then AT&T will lose customers (and course correct).

AT&T claimed there would be job creation if the merger went through. I think that's completely ridiculous. The only way to realize efficiencies post merger would of been to eliminate duplication, and lay off folks. Finally, this industry never prices things because of some moral conscience-- it's not the "right thing to do." - This industry solely prices based on competition. More competition is what gets you better pricing.

With both AT&T and Verizon doing LTE, there will be much less differentiation in the market. At the moment, LTE is considered data-only, but it will be used for voice too. At that point, there really won't even be minor differences in the services offered.

-Dan

AT&T both announced and even advertised the deal prior to approval, which was a bad idea.

[elgee02]

Man there is some grade A delusion going on when people actually think the AT&T/T-Mobile merger would have actually been a good thing for consumers, wow.

[GSMinCT]

Well, Thank you. And there's competition That isn't across systems. Most people require coverage. Most people require a phone. That covers a lot of people. This would even include prepaid. Any companies that offer this are competitors As evidenced by the definition given above.

Spoken from my motorola byonics using google voice

Yes, but it's the same thing as saying a Ford F-150 competes with the Honda Civic or the Smart Car. Yes, they are both cars, no, they aren't aimed at the same target market, and no, they don't directly compete with each other.

[GSMinCT]

Man there is some grade A delusion going on when people actually think the AT&T/T-Mobile merger would have actually been a good thing for consumers, wow.

It would have been good for me. More towers and more capacity. Not like I care about T-Mobile anyways. It would have increased AT&T's HSPA+ capacity in NYC by over 2x. Going from 50mhz to 70mhz of HSPA+, and ending up with a denser tower spacing would have had a multiplicative effect for increasing capacity.

[Bob859]

Yes, but it's the same thing as saying a Ford F-150 competes with the Honda Civic or the Smart Car. Yes, they are both cars, no, they aren't aimed at the same target market, and no, they don't directly compete with each other.

The F-150 may not compete with the Civic or Smart Car, but the Ford Motor Company does compete with those two, in addition to all other vehicle manufacturers.