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Consumers Union Warns Congress that AT&T/ T-Mobile Merger means Higher Prices, Less Satisfied Customers

News Release

Consumers Union – Nonprofit Publisher of Consumer Reports

Tuesday, April 12, 2011

Consumers Union Warns Congress that AT&T/ T-Mobile Merger means Higher Prices, Less Satisfied Customers

WASHINGTON – Recent surveys show wireless consumers who choose T-Mobile have access to lower priced plans and are more satisfied with their service than AT&T customers, according to a letter sent to key members of Congress by Consumers Union, the nonprofit publisher of Consumer Reports.  The letter comes as lawmakers begin scheduling hearings on the proposed merger of AT&T and T-Mobile.

“It is critical to look at the effect this merger would have on consumers’ pocketbooks, choice and service and, ultimately, it does not appear to be in their favor. AT&T wireless plans typically cost consumers up to $50 more per month than comparable plans from T-Mobile and consumers are consistently less satisfied with the service they get from AT&T than T-Mobile,” said Parul P. Desai, policy counsel for Consumers Union. “We are concerned that T-Mobile’s departure from the wireless market would eliminate a relatively low-cost carrier as an option that many consumers need access to in order to afford quality wireless service.”

Consumers Union is sending the letter to members of the House Energy and Commerce Committee, House Judiciary Committee, Senate Commerce Committee, and Senate Judiciary Committee.

A price analysis survey of the voice and data plans available from AT&T and T-Mobile conducted by Consumer Reports demonstrates that T-Mobile wireless plans typically cost $15 to $50 less per month than comparable plans from AT&T. For example, T-Mobile charges $50 per month for its basic 1,000-minute individual Even More Talk two-year contract plan, while AT&T charges $60 per month for its nearest equivalent Nation contract plan, which includes only 900 minutes. Adjusting for the difference in voice minutes, AT&T costs $200 more per year for a comparable monthly allocation of minutes.

In addition, the most recent cell-phone satisfaction survey by the Consumer Reports National Research Center shows that T-Mobile was meaningfully better than AT&T at providing service with a contract plan. Of the over 50,000 responses, AT&T got lower marks than T-Mobile on almost every attribute rated, suggesting the proposed merger would be a setback to T-Mobile customers if it lead to service more resembling AT&T’s than T-Mobile’s.

Desai said, “These results underscore our concerns on the negative impact this deal could have on T-Mobile consumers who would ultimately have to migrate to AT&T plans, costing them more for seemingly less customer satisfaction. We urge lawmakers to take this important information into account as the review process gets underway.”

For a copy of the letter to Congress, please contact David Butler at dbutler@consumer.org or Kara Kelber at kkelber@consumer.org.