Nearly two years after first proposing the deal, AT&T got a hard-fought victory this week when a judge ruled that it can buy Time Warner for $85.4 billion.
The merger, which will likely set off the dominoes for more big tech and media acquisitions, was a stinging defeat to the U.S. Justice Department, which argued that the accord would limit customer choice and be an unfair corporate advantage. Told not to challenge the ruling, the government is reportedly mulling whether to do that anyway.
What the Time Warner-AT&T deal means for consumers
The move figures to reverberate throughout the tech industry as well as the media world as AT&T, the second-largest mobile carrier in the United States, will now join forces with one of the biggest film and TV behemoths in the country.
There are many pieces of the puzzle left to be figured out, but many consumers want to know how this will affect them in the years to come.
Here are some initial takeaways from money expert Clark Howard:
“If you are fully embedded in AT&T’s world, you will likely, as an AT&T wireless customer, see a direct potential advantage moving forward with special streaming packages offered to you,” Clark says. “That’s the most immediate potential consumer benefit.”
Clark says to be on the lookout for deals as AT&T specifically tries to lock in customers at enticing rates for what is sure to be a wild ride. But he also issues a warning to people who are afraid of change.
“When you look further, what will happen in any industry that is consolidating with companies in shrinking markets is that they will try to maximize revenue from people who are creatures of habit. So if you look at these big mergers that are going to happen this year and next year, if you are someone who — you do what you do — you have that remote from whatever pay TV service you use and you have your cell phone with whoever you have it with, you’re going to get clobbered in the wallet.”
That’s because it’s common for these newly formed corporations to try to take advantage of customers’ immobility, leading to price hikes. Clark says the looming landscape is one that will not be kind to you if you have an affinity to brand names.
“If you are someone who tends to be loyal and you’ve been with the same cell phone carrier for as far back as you can remember, the reward for you is that your wallet is going to be shredded,” he says. The same goes for cable TV customers.
But as these mergers crystallize (Comcast is expected to make a play for 21st Century Fox soon), it’s not all doom and gloom for the little guy, Clark says. “If you are someone who is willing to embrace alternative opportunities and change, the era we are in will offer you more choice and lower prices.”
People who have made the leap from traditional cable TV to streaming services have saved tons of money.
Additionally, wireless customers who have been willing to jump cell phone providers in search of a better deal have typically found one.
Clark says the important thing is to be nimble in your quest for a better deal. “Remember this: Be a free agent. Don’t be a sitting duck,” he says. “Be someone who’s looking for the best deal, looking for new ways of doing things.”
Hear Clark’s thoughts on the AT&T-Time Warner merger: