Description: US cellular customers are now dealing with a world in which there are only 3 major carriers. T-Mobile has received regulatory approval to purchase Sprint. Along with the deal, T-Mobile has promised to hold the line on rates and to improve service in rural areas. Some critics maintain that it will be very difficult to ensure the company keeps its word.
Date: April 1, 2020
1) What do you think will happen to rates for consumers with the reduction to 3 major suppliers?
2) Have you ever compared the rates for US phone and data plans to Canadian rates? If there are differences, what might explain them?
3) On page 654 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you will find Illustration 12-3 providing accounting guidelines for strategic investments like this acquisition. Which of the three methods would likely be used to account for the type of investment discussed in this story?