Introduction

While the current talk is about an offer by Cingular to merge with AWS, there will likely be competitive offers with no less than four other potential suitors including Vodafone, T-Mobile, Nextel, and NTT DoCoMo. This Perspective explores the potential industry impact of a merger in terms of end-users, suppliers, technology development, and distribution channels.

Customers

While it may be a bit rocky at first, cellular end-users will benefit from this consolidation as the newly formed company will work to become extremely competitive against the likes of Verizon Wireless and Sprint PCS.  The new company will surely work on the perception of poor service from AWS as per the recent evidence – as reported by the Wall Street Journal, AWS has the most complaints to FCC versus any other US wireless carrier.

Among improvements, customers should see improvements in roaming and seamless coverage for both basic voice service as well as value-added services such as wireless data (GPRS, EDGE, and WiFi), and others such as prepay, and wireless content (entertainment, digital goods, news and information).

Suppliers

As with any consolidation, a merger involving AWS would impact suppliers in at least two profound ways.  Firstly, the new combined company will most definitely use its bolstered buying power to review existing supplier relationships and cause supplier consolidation with the goal of reducing operational complexity and reducing costs.  The second impact will be increased price pressure for suppliers as surviving vendors fight to maintain their market share.  A third impact will be a need to focus on specific technology development for the new combined company.