AT&T is arguing that its merger with T-Mobile wouldn't reduce wireless competition in America, but the Department of Justice is having none of that. To shore up its point, the DoJ released a chart showing that in 17 U.S. metro areas, a merged AT&T/T-Mobile would have more subscribers than all the rest of its competitors, combined.
That doesn't just make AT&T the largest player in a market, that makes it dominant. The 17 cities AT&T would own are mostly in the South and West, AT&T's strongholds, and they include big cities like Houston, smaller metro areas like Tulsa and key tech centers like San Francisco and Austin. You can see all the cities where AT&T would have a majority share of the marekt in the map below.
AT&T argues that vibrant competition not just from Verizon Wireless, but from smaller players like MetroPCS means that T-Mobile can be taken out of the equation. But these numbers show how small the little guys really are. Dallas is MetroPCS's home market and one of its strongest, and it's a place where Verizon, MetroPCS and Sprint all offer 4G networks. But a combined AT&T/T-Mobile would simply crush all of those players there with a 58% market share on its own.
The mega-carrier would have a greater than 40% share in another 39 of the top 100 metro areas, including New York, Los Angeles, San Jose, Boston and St. Louis. The economies of scale would make it much harder for small players to compete, as AT&T would be able to leverage family plans and a massive network of retailers to make other carriers appear less relevant.
Obviously, market share changes. Some pundits are arguing right now that T-Mobile's struggle to keep its users means that the company can't survive. But T-Mobile still has 33 million users—more than the next ten carriers combined. (MetroPCS has 8.9M, Cricket 7M, U.S. Cellular 6M, Cellular South 900K, Alltel 800K, Cincy Bell 600K, nTelos 424K and everyone else is smaller.) Even if it stays the same size, the DOJ concluded, T-Mobile plays a big enough role in the market to ensure competition, and that role can't easily be replaced.
Here's the map that shows which markets AT&T would essentially own in the event of a merger with T-Mobile (click to see it enlarged):
For more, see my letter to the FCC about the merger as well as 10 Big Questions About the AT&T/T-Mobile Merger and AT&T Buys T-Mobile: Great For Them, Bad For You. Also check out the 7 Alternative Buyers for T-Mobile USA slideshow below.