AT&T and T-Mobile's failed merger Research Paper

AT&T and T-Mobile's failed merger - Research Paper Example Both the corporation, AT&T and T-mobile were of the opinion that the merger lacked the intensity to affect the interests of the consumers in the wireless market. In other words, the wireless market will remain indifferent in spite of the merger. The deal amounted to 39 billion dollars. As the result of the deal, AT&T emerged as the largest mobile phone service provider in the country. Research question Whether the deal would have been fruitful from the consumers’ point of view? Literature Review and Analysis The resulted deal would offer AT&T to enjoy 43% of the market share. The market power would have widened the difference among the competitors in the market further. Researchers were of the opinion that the resulting merger would contribute to enhance the market power. The market structure is highly concentrated with lots of competitors and follows the guidelines of the horizontal merger. The arguments as well as the evidence provided by AT&T in the application were found t o be insufficient to ignore the presumption of increase in market power. According to the guidelines, the concentration of the market and the share of the market are measured on the basis of revenues. The products can be differentiated in the market and therefore revenues will act as the relevant parameter for measurement. If the revenues are fully attributable to the facilities based carriers, The Herfindahl-Hirschman Index would result to 3356 for the wireless market while the increase in index would be 741. On the other hand if the subscribers of the resellers are fully attributed to the resellers, then the index on the basis of revenue would be 3279 and the increase in the index would be 727. Therefore both the approaches show the market power is getting enhanced as a result of the merger. T-mobile continued to remain a strong player in the market. The other players lacked the competency to deal with the slack resulting from the elimination of T-mobile from the market. The effec ts of anti-competition could not be rubbed off completely as the resulting inefficiencies were not up to the mark (Goldfarb, 2011). The competitive disadvantages of the competitors rose. The effect was felt on quality and costs. The costs took the steep rising curve with poor standards of quality. The power of the competitors was limited and the roaming services felt the heat. AT&T and T-mobile offered the same quality of product under different conditions and at different prices. The authorities have to evaluate the national market and the local market separately as the price ranges kept on changing. The competitive effects on both markets were evaluated. A concern at the national level may not be a concern at the local markets and vice versa. The effects of the merger on the consumers would have been two folds. The subscribers of T-mobile will be left with no other option but to avail the highly priced smart phones and data services from AT&T instead of the affordable data plans o f T-mobile. The objective of AT&T in the merger was to enhance the consumer base (Besen, Kletter, Moresi, Salop and Woodbury, 2012). If the consumers of T-mobile come under the umbrella of AT&T significant amount of revenues will be generated and AT&T can gain the same level of profits. The customers will have to feel the pinch on the pockets by paying higher charges and also compromise of the quality of service. If T-mobile can be rubbed off from the market scenario, AT&T

Financial Reporting and Analysis Essay Example | Topics and Well Written Essays - 1250 words

Financial Reporting and Analysis - Essay Example b) The Board may be required to abandon neutrality and establish standards of reporting that conceals the particular transactions impact from the users of the financial reports. These costs will, however, exist regardless whether or not FASB authorizes their recognition in financial statements. It will not alter the economics of transaction and it will only withhold information from the users of the financial reports while making informed decisions and, eventually, the credibility of financial reports is impaired. c) The SEC relies on the Board and the private sector predecessors to establish and upgrade financial accounting and the reporting standards Accounting standards are therefore, established through a due process and open deliberations system to improve and certify the Board’s mission of improving financial reporting. By developing neutral accounting standards to the best interest of the public, similar transactions should be treated similarly and different transactions treated differently. This clearly shows that standard setting is in private sector in US. d) Some accounting standards are subverted so that they can achieve their purpose which is not related to fair and accurate presentation of financial statements. They there fore fail in the purpose they serve and consequently lack economic effect since they are not of importance to decision makers on allocation of resources and making other economic decisions. a) Dividends should be disclosed in changes of equity statement and in the notes as follows. Dividends that are declared are entered in the Retained Earnings account on the credit side and credited to the dividends payable account. When paid, dividends are posted to the dividends payable account in the debit side and to the Cash account, are posted to the credit side. Notes concerning the dividends can be illustrated as follows; b) The provision for a law suit should not be disclosed because the likelihood of