Mergers & acquisitions

DoJ Blocks AT&T/T-Mobile Merger

The U.S. government filed suit Wednesday to block the proposed $39 billion merger between AT&T Inc. (NYSE: T) and T-Mobile US Inc. on grounds that it will increase prices for mobile consumers.

"The department said that the proposed $39 billion transaction 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," the Department of Justice said in a prepared statement this morning.

Sprint Corp. (NYSE: S) and various consumer groups have argued much the same line since the merger was announced. AT&T has countered that the merger will add thousands of jobs and allow it to deploy a truly nationwide 4G network.

AT&T remains "confident that this merger is in the best interest of consumers and our country."

"We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DoJ that this action was being contemplated," says Wayne Watts, AT&T senior executive vice president and general counsel, in an official statement on the matter.

"We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed," he continues. "The DoJ has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court."

Why this matters
The T-Mobile merger is the easiest way for AT&T to add much-needed network capacity and spectrum for 4G services. T-Mobile, meanwhile, has no clear path to LTE without the merger.

For more

Our entire list of coverage relating to the proposed AT&T/T-Mobile merger can be found here.

— Dan Jones, Site Editor, Light Reading Mobile

COMMENTS Add Comment
joset01 12/5/2012 | 4:54:59 PM
re: DoJ Blocks AT&T/T-Mobile Merger

Sprint+Consumer groups+states+FCC spectrum review=anti-trust?


I can't remember the last time the DoJ moved to block a huge mobile operator merger. Put conditions on a merger? Sure... Block it? Not for a good long while...

bergea 12/5/2012 | 4:54:58 PM
re: DoJ Blocks AT&T/T-Mobile Merger

Today's DOJ announcement certainly vindicates Sprint and suggests that AT&T may be forced to pay the $3B break-up fee if the deal ultimately does not go through. This naturally leads to a discussion of how DT should invest this fee, in new spectrum for T-Mobile USA to use in a real 4G LTE network, continue investing T-Mobile USA's enhanced HSPA+ network, or just more AT&T bashing, Carly Foulkes "faux G" commercials.  

What do you think DT should do with the $3B?

gtchavan 12/5/2012 | 4:54:57 PM
re: DoJ Blocks AT&T/T-Mobile Merger

Had this gone through we would have seen bad service proliferate.   Why infect T-Mobile with the same disease.  Both ATT and Verizon have plenty of money to roll out a decent LTE, but they are too cheap and bureaucratic to do it.  Left up to these guys, we would still be talking with flip phones.

sam masud 12/5/2012 | 4:54:57 PM
re: DoJ Blocks AT&T/T-Mobile Merger

I think there's a better than 50-50 chance the merger will go thru after some modifications.

joset01 12/5/2012 | 4:54:54 PM
re: DoJ Blocks AT&T/T-Mobile Merger

Bad service proliferate?


Plus ca change!!! ;-)

krishanguru143 12/5/2012 | 4:54:54 PM
re: DoJ Blocks AT&T/T-Mobile Merger

Who is the say that T-Mobile USA would even see a single dime?  DT has openly said that they do not want to put any additional money into US division.  The ~$6 billion in spectrum could be sold back to AT&T as well, leaving T-Mobile USA with nothing.

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