Final answer:
South African consumers could have benefited from lower service prices due to economies of scale following the emergence of the big three telecommunications companies, but concerns of reduced competition potentially leading to higher prices were also raised.
Step-by-step explanation:
The emergence of the big three telecommunications companies in South Africa has brought certain benefits to consumers. The companies argued that the merger would lead to lower service prices due to the advantages of economies of scale. Nevertheless, there were concerns among activist groups that such mergers might reduce competition and potentially lead to higher prices for consumers. The effectiveness and actual impact on consumers continue to be debated by economists and watchdog groups.
When evaluating the situation in South Africa and other global contexts where mergers of large telecommunications companies have taken place, such as the merger between AT&T and BellSouth, one must consider both the theoretical benefits and the potential risks. Increased efficiency and reduced costs from economies of scale can indeed pass on savings to consumers, potentially resulting in better services at lower prices. On the flip side, reduced competition due to such mergers can sometimes lead to higher costs and limited options for consumers.