PlumX Metrics
SSRN
Embed PlumX Metrics

The Proposed Merger of AT&T and T-Mobile: Are There Unexhausted Scale Economies in U.S. Mobile Telephony?

SSRN Electronic Journal
2012
  • 0
    Citations
  • 2,218
    Usage
  • 5
    Captures
  • 0
    Mentions
  • 32
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Usage
    2,218
    • Abstract Views
      1,916
    • Downloads
      302
  • Captures
    5
  • Social Media
    32
    • Shares, Likes & Comments
      32
      • Facebook
        32
  • Ratings
    • Download Rank
      201,894

Article Description

From the beginning, the debate on the likely results of the proposed acquisition of T-Mobile USA by AT&T focused more on the claims of the parties that “immense” merger efficiencies would overwhelm any apparent losses of competition than on the presence or absence of those losses, and the factors that might affect them, such as market definition. The companies based their “economic model” of the merger on estimates of efficiencies on AT&T’s “engineering model”, without addressing the credibility of the results of the latter in the context of the economics literature on the telecommunications sector. In this paper we first argue that the economics literature on economies of scale (especially) and economies of density in mobile telephony suggests caution in expecting such massive cost reductions from increasing the size of an already very large firm. We then present new econometric evidence from an international data base supporting the notion that most large mobile telephone service providers have reached the point of constant or even (rarely) declining returns to scale.

Bibliographic Details

Yan Li Li; Russell W. Pittman

Elsevier BV

competition; mobile telephony; economies of scale; economies of density; merger efficiencies

Provide Feedback

Have ideas for a new metric? Would you like to see something else here?Let us know