Blog- Accounting and Financing

            This chart exemplifies how the telecommunications industry has changed since 1984.  In 1982 AT&T had to break up its company since it had a monopoly over the telecommunications industry. In an anti-trust suit the deal was for them to end their monopoly.

            In 1984 there are six larger telecom companies that are offering services to the public. Over many years each company was purchased or merged or acquiesced by other companies, which lead to the leading five-telecommunication companies, with four main wireless companies. Ultimately there are 24 million AT&T users, Verizon: 26 million, T-Mobile: 34 million, Sprint: 50 million users. This proves how large the wireless industry is with a total of 134 million users in the United States. Worldwide this industry continues to grow as the world develops. The wireless telecom industry will continue to expand; however, the wire line telecom industry may face serious challenges in 2011. This is because more people are moving to use wireless cellular services. AT&T has 96 million users, Verizon 94 million users and Century link 15 million users. This totals to 205 million users in the United States, which is larger than the wireless industry. The wire line phone services decreased during the recession because people had to choose what is absolutely necessary if they were severely affected by the recession. In most cases a family would choose to pay their wireless cell phone bill over a home phone since a cell phone is believed to be more useful. I wonder since the economy is getting better if people will once again purchase wire line home phone services or will be content with just their cell phone. I also am curious if the wire line companies will continue to bundle deals with the usage of a faster Internet service as well as television services. With these bundled deals people will want to purchase their products because it seems as if they are getting a lot for their money.

            The wireless industry might see serious changes if a new merger goes through the government. AT&T wants to purchase T-Mobile for $39 billion dollars. If this deal goes through then AT&T will control 40% of the U.S. wireless market. I wonder if the government will approve this deal. I also am curious to what affects it will have on the economy. I am not sure if T-Mobile customers would stay with AT&T or if they would switch over to Verizon. I think if AT&T buys T-Mobile than the telecommunication industry with AT&T and Verizon competition will increase and Verizon will have to work harder to catch up with AT&T for customers. They will also be more competitive for deals right after the merger, because I believe Verizon is going to try to take customers from AT&T and T-Mobile. However, I know some phone plans might force people to stay with AT&T for a certain amount of time until their cellular phone plan expires.

-rachel

http://blogs.wsj.com/deals/2011/03/29/a-tangled-family-tree-how-att-became-att/?KEYWORDS=telecommunication+industry