Yesterday, Monroe, La based CenturyTel paid $10.6 billion in stock for Denver based
Qwest, creating the third largest phone company in the US. While the deal is still subject to regulatory approval, the company talking heads are already talking about how the deal will allow them to provide lower prices through the "synergies" created from the merger. For those who don't know, "synergies" is a wonderful little business term used in Mergers and Acquisition Land that essentially means "jobs are going to be cut, service will suffer as a result, but hey, did you see we now do business in Denver?!!!"
The CenturyTel management team and their heavily paid investment bankers have already hit the ground running, assuring customers that with expansion comes lower prices to customers. Last time I checked, eliminating competition doesn't allow companies to provide cheaper services, it let's them charge more because there are fewer option for customers to choose. Let's not kid ourselves people, companies don't go into business to help customers, they look to grow revenue through expansion, and that's exactly what's happening here. Companies certainly don't pay exorbitant banking fees just to give their customers cheaper products. While CenturyTel may be acquiring
Qwest's landlines and infrastructure, they are also assuming $11.8 billion of
Qwest's debt, and providing cheaper services to customers isn't exactly going to cover those debt service payments. The bottom line is, with every merger, there are many jobs that overlap, and thus are eliminated. For those
Qwest customers and employees in the Denver area, where
Qwest is based, one can only expect the inevitable cost cutting to begin eliminating jobs, drastically affecting customer service and customer wait times. Let's also not forget that from an organizational standpoint, organizational infrastructure takes a while to figure out, which again should only contribute to decreasing customer satisfaction, and increasing customer wait time. If you are a
Qwest customer, or one of the CenturtTel customers who have written to complain about service, consider yourself warned, it's going to get worse before it gets better.
For more about CenturyTel's acquisition of
Qwest,
Click Here.
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Posted by GetHuman on Fri, 23 Apr 2010 3:38pm