Mobile, Mobile: who art thou?
Two news summaries/perspectives on an impending merger:
CINGULAR, VODAFONE SHOW THEIR CARDS TO AT&T
Expect to see news by the end of the day that Cingular Wireless and
Vodafone have made official bids for AT&T Wireless. There is a 5pm deadline
for bids today and the board will consider offers this weekend. They are
currently six national U.S. wireless carriers, but price and marketing wars
have eroded profits. ”Cingular is by far the most likely buyer here, with
a straightforward deal, for a whole variety of reasons,” said a Goldman
Sachs report out Thursday. Goldman cited Cingular’s ability to generate
greater ‘’synergies,” such as cost cuts, for the best investor returns.http://www.usatoday.com/usatonline/20040213/5924807s.htm
CELLPHONE MERGER CURE
When cellphone prices drop because of competition, the historical cure has
been to merge with another company and losing a competitor. But that remedy
may not work any longer because of challenges from new technologies and a
rush of new entrants into the market. Mergers would likely have to shrink
the field of providers in half before they lead to higher prices and less
competitive behavior. One reason is that the big carriers sell their
services wholesale to resellers — like Virgin — who then retail to
targeted markets. Another factor is the growing popularity of Wi-Fi to
route calls over the Internet — and avoid conventional cellphone networks altogether.