Thanks to nearly $100 billion in mergers and deals, Verizon Communications and SBC Communications will soon emerge as the two dominate forces in the US telecom industry. The two companies control the two largest North American wireless carriers -- Cingular Wireless and Verizon Wireless. Once SBC completes its pending merger with AT&T and Verizon closes its deal with MCI, the two companies will control the largest landline businesses. Every American could be impacted by these two companies. Many insiders argue that these two mega-mergers could raise the cost of telecommunications services in the US. Some analysts predict that business customers could be the hardest hit.
Other insiders claim this consolidation will only spur the evolution of VoIP, the growth of which could mitigate any anti-competitive affects of the SBC and Verizon deals. If SBC and Verizon try to raise corporate phone rates, enterprises will likely flock to VoIP. Consumers too are likely to move to VoIP at a faster rate if these two companies try to flex their market might to raise prices.
For more on the impact of merger mania on the US telecom market:
- read this report from today's Wall Street Journal (sub. req.)
PLUS: The debate between incumbent telecoms and municipalities over citywide WiFi networks intensifies. Blog