Mobile Phone Mergers and Market Shares Short Term Losses and Long Term Gains

The US mobile phone industry has dramatically consolidated through mergers. The authors investigate whether a merger increases the performance of a combined carrier over the sum of its constituent parts. They first directly compare the quantities of post-merger carriers to those of their pre-merger predecessors. This analysis considers only two years after a merger, as most carriers engage in new mergers after that time. To examine possible long run implications, they also explore the cross sectional relationship between outcomes and measures of firm size, as firm size is increased in a merger. They examine the market share of new subscribers. They also examine two measures of firm size: the amount of a carrier's geographic coverage and its past subscriber count.