You might join me in the contempt
for the various sponsored (“coin-operated”) scholars who sing the praises of
the TMobile and Sprint merger. These sponsored researcher/advocates never get
around to explaining just what the separate companies cannot do now that they
will be able to do as a combined company. There is ample empirical evidence
that merged companies do not accrue the much-touted consumer and shareholder
benefits.
Let’s
consider this issue in the context of commercial aviation and the airline I
loved to hate for decades: The one in the same Allegheny Airlines, USAir and
U.S. Airways. Several decades ago, this
airline acquired three, regional carriers: Piedmont; Pacific Southwest Airlines
and America West. At least 2 of the 3 carriers had a better than average
consumer ratings before their merger. Of
course, the rest is history: the merged company managed to leach out everything
good coming from the acquired companies.
Piedmont
served mostly southern U.S. destinations with the same kind of pleasantness Southwest
provides most of the time now. In addition, Piedmont innovated and offered
price discounts. They had a “Hopscotch Fare”
that provided savings for passengers willing to take multiple flight segments
instead of a non-stop flight. I
understand that passengers loved PSA and air traffic controllers used the name
Cactus for America West, perhaps to commemorate the airline’s folksiness, but
maybe to avoid confusion with American Airlines, the company that ended up
acquiring U.S. Airways.
In any
event, American Airlines does not seem to offer much of anything cheaper or
different than the other two major carriers United and Delta. Consumers choose their poison and lock in for
the occasional perk loyalty and frequently flier programs offer.
Just now I
wonder whether TMobile, Sprint and the vast array of funded merger advocates
will convince the court of public opinion how much improved, cheaper,
innovative and great the U.S. wireless marketplace will become. The next time you board a domestic flight,
think about how greater the user experience has become thanks to elimination of
Continental, Northwest, and dozens of other competitors.