Now that Bell Atlantic and GTE have merged, the newly formed company ranks among the largest global players. So will the just-approved merger of SBC Communications and Ameritech. So will MCI and Sprint. These companies are now big enough to begin to invest the trillions of dollars it will take to build global communication networks. Mergers mean one company where before there were two.
Competition can work even among just a few companies in a market.
Early in the history of the automobile, there were many small car companies. Over time, the industry consolidated. Yet competition in the auto industry is hardly suffering, even though there are few new entrants in the car business compared to telecommunications. Ford, General Motors and Chrysler compete vigorously with Toyota, Isuzu, Nissan and others. The greatest threat to competition came from regulators, who tried for years to protect domestic automakers from foreign competitors.