U.S. moves to block AT&T merger with T-Mobile
Reuters reports: The U.S. Department of Justice has filed an antitrust lawsuit to prevent AT&T from acquiring one of the nation's other major mobile service providers, T-Mobile.
AT&T and T-Mobile are two of the four providers -- Sprint and Verizon being the others -- that control more than 90% of the market. The DOJ statement says that the acquisition would "substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives." [Ed. note: here! here!]
The suit was filed in the U.S. District Court for Washington D.C.
AT&T announced in March that it planned to purchase T-Mobile from Deustche Telekom for $39 billion in cash and stocks, a deal that would give it 130 million subscribers and push it past Verizon as the nation's top mobile provider.
The DOJ complaint indicates that the problem is not just the number of subscribers each company has, but the scope of their carriage. They compete nationwide in 97 of the 100 largest cell phone markets. Regional providers simply do not have the ability to compete with the national networks.
“Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers," Deputy Attorney General James M. Cole said in a statement.
AT&T and T-Mobile are two of the four providers -- Sprint and Verizon being the others -- that control more than 90% of the market. The DOJ statement says that the acquisition would "substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives." [Ed. note: here! here!]
The suit was filed in the U.S. District Court for Washington D.C.
AT&T announced in March that it planned to purchase T-Mobile from Deustche Telekom for $39 billion in cash and stocks, a deal that would give it 130 million subscribers and push it past Verizon as the nation's top mobile provider.
The DOJ complaint indicates that the problem is not just the number of subscribers each company has, but the scope of their carriage. They compete nationwide in 97 of the 100 largest cell phone markets. Regional providers simply do not have the ability to compete with the national networks.
“Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers," Deputy Attorney General James M. Cole said in a statement.
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