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AT&T Faces Government Complaints Amid T-Mobile Merger Attempt

August 31, 2011

 

According to a complaint filed in federal court on Wednesday, the U.S. government says AT&T’s proposed $39 billion acquisition of T-Mobile USA Inc. would “substantially lessen competition” in the wireless market.

The complaint says AT&T would violate U.S. antitrust law if it is allowed to purchase T-Mobile. 

“AT&T´s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.

If regulators were to reject the deal, AT&T would have to pay Deutsche Telekom $3 billion in cash.  It would also have to provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, according to a Bloomberg report.

AT&T said on Wednesday that if the merger goes through, it will bring 5,000 wireless call-center jobs back to the U.S.

AT&T and T-Mobile have a combined total of 25,000 U.S.-based wireless call-center employees. 

If the merger were to be approved, it would concentrate 80 percent of the U.S wireless market in AT&T/T-Mobile and Verizon Wireless.

The company said the deal would allow it to quickly add capacity to meet growing demand for high-speed wireless service.  Rivals like Sprint Nextel Corp. say the combination would hurt competition, while public interest groups have said it would only lead to higher prices.

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Source: RedOrbit Staff & Wire Reports



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