This deal, like others in consolidating supply markets like office products and overnight/small parcel delivery, has all the hallmarks of putting greater power in the hands of suppliers and less in that of buyers. Even if fees rise slowly, and are not reflected in near-term voice and data price hikes for businesses, you can be sure that businesses -- if history is any indication -- will come out on the short-end of the spending stick. It's interesting to note, however, that the ways suppliers often take advantage of buying organizations in consolidating supply markets often lurk below the surface. Here are a few examples I've seen over the years:
- Prices (outside of base prices) rise beyond the level they should based on underlying inflation, commodity inflation, etc. In overnight/small parcel/transportation, accessorial charges are a prime example of this, as are new requirements (e.g., changing delivery times for the same previous cost/level of service)
- Suppliers fire their less desirable customers or threaten to fire them unless they become easier to do business with (read: more profitable). There are stories of this in the office products industry which don't make the headlines because companies won't go on the record, but are fascinating to observe nonetheless
- Suppliers exert pressure through intermediaries (e.g., GPOs, leveraged contracts, etc.) or make intermediaries do their dirty work through them with customers who fall into the "less desirable" bucket; see above
- Invoice errors (almost always in a supplier's favor) and other mistakes increase during the multi-year "post-merger integration" period
- Non-price contract terms (e.g., payment, indemnification, service level agreements, relief, etc.) gradually change overtime in the mega-supplier's favor in a "take it or leave it" manner
The Spend Matters trust busting bottom line here is that mega mergers and consolidation in supply markets that leave fewer than three truly competitive (if not equal) players, rarely ends in an outcome that benefits procurement, supply chain and finance organizations on the buying side of the equation. Chances are, given the relatively loose scrutiny with which our governments have applied antitrust legislation in recent years in the US, it's unlikely that business voices will be heard in the case of T-Mobile and AT&T. But perhaps in the spirit of President Theodore Roosevelt (a.k.a. T-Rex) we should all let our antitrust voices be heard.
One way to voice our concern is to rally the troops (read: voters) both inside our organizations and with the companies we interact with. Everyone has a legislative "representative" they can write, and would likely benefit from joining the cause. Or contact the DOJ or SEC if you know who to reach out to. No doubt, we are all impacted by greed that is fueled by the belief within some organizations that they can behave like supertankers in a narrow shipping lane. If we concur that their market cornering course releases them from the business responsibilities that most of us live by every day, then we deserve the price exploitation that they convey upon us.
To apply a favorite Teddy quip: "In life, as in a football game, the principle to follow is: Hit the line hard." Indeed, from a procurement standpoint, the only way we can avoid having the opposing team take advantage of an extra player on the field and referees that miss off-sides calls is to move with decision on issues such as this. If you are worried about anti-competitive -- or potential anti-competitive -- behaviors of suppliers and you're in procurement, don't just take it up with your vendor. Take it a step beyond. And do it quickly.