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The merger between T-Mobile and Sprint did indeed increase the concentration in the cell-phone service provider market. Market concentration refers to the extent to which
The merger between T-Mobile and Sprint did indeed increase the concentration in the cell-phone service provider market. Market concentration refers to the extent to which a relatively small number of firms account for a large proportion of the total output or sales in a market. It's often measured using tools like the Herfindahl-Hirschman Index (HHI). Prior to the merger, the major players in the U.S. cell-phone service provider market were Verizon, AT&T, T-Mobile, and Sprint. This means there was a relatively lower concentration as the market share was distributed among these four companies. After the merger, the market was reduced to three major players. This means that the same market share was now distributed among fewer companies, thus increasing the market concentration. In fact, the increase in concentration can lead to less competition, which could potentially lead to higher prices for consumers. However, it could also lead to efficiency and cost savings due to economies of scale, which could potentially be passed on to consumers in the form of lower prices or improved services. The actual outcome would depend on a variety of factors, including the specific strategies adopted by the companies involved and the responses of their competitors and customers
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