Carrier Share (%) Verizon 34.5 AT&T; 32 Others 6.6 T-Mobile Sprint 15.9 a. Compu
ID: 1120535 • Letter: C
Question
Carrier Share (%) Verizon 34.5 AT&T; 32 Others 6.6 T-Mobile Sprint 15.9 a. Compute the Herfindahl-Hirschman Index (HHI) for the wireless industry before and after the merger of AT&T; and T-Mobile b. According the New Horizontal Merger Standards in Table 3.2, would the merger be considered safe or unsafe? Briefly explain Table 3.2 Horizontal Merger Standards (2010 now) Change in HHI 0-100 100-200 >200 Post-merger HHI over 2500 (highly concentrated) Safe Maybe unsafe Unsafe Post-merger HHI between 1500 and 2500 (moderately concentrated) Safe Maybe unsafe Maybe unsafe Post-merger HHI below 1500 Safe Safe SafeExplanation / Answer
1) A) HHI before merger = 34.52 + 322 + 15.92 + 112 +6.62
HHI = 1190.25 + 1024 +252.81 + 121+43.56
HHI= 2631.62
B) HHI after marger = 34.52 + 432 + 15.92 + 6.62
HHI = 1190.25 + 1849+252.81+43.56
HHI = 3335.62
yes the merger is considered is to be safe because the market is highly concentrated. they can grab the largest market share and can act as a one big farm ruling the market.
2) and all. please upload it again. its against chegg policy