AT&T, T-Mobile US merger opposed on anti-trust grounds
The United States Department of Justice has filed its opposition to the AT&T - T-Mobile US merger on anti-trust grounds.
AT&T’s elimination of T-Mobile as an independent low priced rival would remove a significant competitive force from the market
AT&T was pursuing the merger in an attempt to get T-Mobile's AWS spectrum to use for a bigger, better LTE 4G roll out.
(Probably smart that T-Mobile wasn't waiting on AT&T to get iPhone 5.)
This story is still developing and we'll update with more information as it comes in.
[Bloomberg, thanks Jack!]
Editor-in-Chief of iMore, Executive Producer at Mobile Nations, co-host of Iterate and ZEN and TECH, cook, grappler, photon wrangler.
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Finally some sanity in Washington. Let's hope they can hold the line. Corporate money always tries to find a way around.
Yeah, fuck giving anyone good service. Let's just swamp the market with dozens of bullshit carriers and let the customers fight it out.
So if T-mobile customers want different service they can go to ATT/Verizon, etc.
How does ATT improve TM service by buying them since they can go to ATT now. It will only remove a low cost option.
Is "good service" a code for cost your a$$ more money. What drives costs down--Corp good will? Don't see that happening.
Look genius, T-Mobile will be out of business SOON. AT&T is trying to kill two birds with one stone: get T-Mobile's already built 4G/LTE towers & increase spectrum for all of their (complaining) customers. Simple. It makes sense to you for T-Mobile to go out of business & AT&T has to wait 4 years for their towers?! Doesn't make any sense. At least try to explain what your saying. You sound crazy & delusional. AT&T can't charge more than the competition. If Verizon lowers prices, they have to lower theirs too. But last time I checked, Apple announces a feature & Verizon raises prices. So, the carriers have it backwards. Stop trying to make AT&T the heavy! T-Mobile is easily the worst GSM carrier in existence. Sprint & Verizon are CDMA carriers. CDMA is prehistoric in comparison to GSM. Wake up!
Thank you SBMobile! someone that knows whats going on and doesnt just talk without thinking or doing any research first.
Are you some kind of retard? Less competition in the marketplace leads to less innovation and higher prices. That's economics 101, Comrad.
Where was all this fuss when Verizon took Alltel?
Why would there be fuss? Alltel was a small market - when it was sold the assets were given to both at&t and Verizon. Even with the merger, that left Sprint and T-Mobile. Overall, the dissolving of Alltel still left 4 major competitors along with each carriers small "budget" services like Virgin Mobile and Boost.
Doesn't Virgin use Sprint service? Which would really be a closer to rebranding, even if they have separate cust. serv, etc.
And Both are more pay as you go services which is a smaller segment.
Virgin Mobile (unless things have changed since I worked there) is its own MVNO that licensed with Sprint - so technically, it was/is it's own carrier.
It doesn't really matter if the service is post-paid or pre-paid the coverage is generally the same - and you still have options.
Sprint owns Virgin Mobile! At least here in Canada.
Virgin Mobile USA is owned by Sprint - http://en.wikipedia.org/wiki/VirginMobileUSA
Alltel was the ONLY other legitimate (Reads "able to actually make a call on the service") option besides Verizon in many rural areas. I know because I used to live in one, as well as many of my friends. Of course, not as big of a deal in larger areas, but in rural areas like the one I used to live in, that left Verizon as the ONLY option, which to me is far worse than having one less major carrier nationally. Verizon's shady billing was something I had hoped to avoid by being on Alltel, and thankfully, I no longer live in an area where they are the only option, thus the switch to AT&T. I personally was looking forward to the expanded service from the merger. And if it somehow made it more expensive, I could always become a trendy club savvy hipster, pour on the Drakkar Noir, grab me a couple of shirts from the American Eagle, and switch to Virgin Mobile.
You forget that before it was Verizon, it was Bell Atlantic. BA then acquired NYNEX (the largest provider in the NE), and then acquired national carrier GTE before renaming themselves, Verizon. They were doing exactly what AT&T is trying to do now - become the largest provider in America.
It's all about lack of competition, creation of a Monopoly in areas of the market ie in those locations where the only carriers were T-Mobile and AT&T it would create a monopoly!
When Verizon purchased from Alliance Telecom the wireless service operating as ALLTel they made it clear that in locations where it would create a monopoly or lack of choice these markets would be divested to rivals. AT&T was a beneficiary of this.
Obviously there has been no intention made or implied by AT&T to do the same and this is very likely why the DoJ is planning, or is blocking, the Purchase of T-Mobile by AT&T.
Do you think it is fair for those in affected markets to suddenly find that they cannot have a service unless AT&T offer it. Especially if they had switched from AT&T to T-Mobile because of poor service and suddenly find themselves trapped in a service that they do not want to be in without that option to switch to a rival of AT&T's?
It doesn't matter how small the risk of this monopoly is the DoJ have to look after the interests of people that are affected and I presume have alerted the DoJ that they would lose any choice of carrier.
The difference is that in some rural markets Alltel and Verizon were the ONLY options that could even make a phone call. I know of no markets or areas where that will happen with AT&T and TMobile being the only 2 providers that are available. TMobile has worse rural coverage than AT&T right now. So I doubt there are any markets where this would happen.
Don't forget the $3-billion DT/T-mobile gets if the deal fails to consummate.
i hope this doesnt happen, go AT&T!!!!!
For anyone who remembers AT&T in 1984, this should be no surprise.
"At a news conference Wednesday, Deputy Attorney General James Cole said the combination would result in tens of millions of consumers facing higher prices, fewer choices and lower quality products."
Perhaps fewer choices, but the others are debatable.
Well that's a shame.
AT&T claimed they were pursuing the merger in an attempt to get T-Mobile's spectrum, but a leaked internal email indicates they were not. [link], and that ATT's primary motivation was to reduce competition in the space.
Is there a hidden part of this filing that I am missing? Where does AT&T say they are looking to reduce competition?
IMO, I see a business decision that was made. The choice was pay $3.8 billion and all we get is LTE coverage to more people; who may not buy the service. Or acquire TMobile and get more LTE coverage, more cell sites that are already built, more spectrum across the board, and down the road an overall healthier network.
Now, I personally think the DOJ is right to block this. But AT&T is just as right to attempt to do what they think is right for their company and share holders.
It's nothing person, it's just business. Why does everyone read into everything and always come to the "their EVIL" conclusion?
Evil? Who said anything about evil? Put words in somebody else's mouth, not mine.
And then read the summary again, or, better yet, read the original letter. AT&T's stated reason -- to build out its network coverage through acquiring T-Mobile -- just does not stand up to scrutiny.
In addition to the timing problems, AT&T's own documents suggest they know they can build out an LTE network for far less than the purchase of T-Mobile, especially considering T-Mobile's is strong where AT&T is strong, and weak where AT&T is weak -- they would have to build out those areas themselves, anyways.
It is not a small difference, either -- AT&T is spending ten times on the purchase of T-Mobile what they would on infrastructure buildout. If the deal does not go through, another site suggests [link] AT&T is guaranteeing DT up to $7 billion -- almost twice as much as the entire infrastructure investment would cost were they to go solo.
Of course this is just a business decision. Given the above, however, AT&T's stated story just does not add up, from a business perspective. Given the 10x price difference and the almost 2x failure guarantee, in the absence of any more convincing story from AT&T that the elimination of a competitor itself is the only reason that could possibly justify those kind of outlays.
I could be wrong, of course, but at the very least the DoJ is acting entirely appropriately to investigate what those other reasons may be, and to block them if killing competition appears high on the list.
I think everyone reads into this way too much. For $39 billion AT&T would not just get to complete the build out of LTE. But the increased spectrum and all that comes with it will increase network capacity overall. AT&T and Tmobile have similar coverage in many areas. But Tmobile does not have the network demands that AT&T suffers. They would be getting much more for that money, their board thought it was the better investment. The $7 billion that goes to DT in the event of a failed buyout is also not new for deals of this nature.
The DOJ isn't saying that they found AT&T's dirty little secret was really only to eliminate competition. They are saying they disagree with the case AT&T presented and that the resulting loss of competition would be worse for consumers than what AT&T has proposed.
I agree with the DOJ's decision but I still see why AT&T proposed the idea. If their only motive was really to eliminate Tmobile, then...well...now they've been sued. But I don't buy that.
"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Deputy Attorney General James M. Cole.
I was pretty pissed after I read this. Lower quality products? Are you freaking kidding me? another stupid statement by our stupid government. ATT has HIGHER quality products than Tmobile already right now! you dufus!!!! I don't see any iPhones on TMO. Not to mention dozens of other better phones. Ands ATT has WAY more towers and coverage. I don't get their stupid argument.
This whole thing stinks of DoJ kissing Sprint/VZW's ass. Ya let's make it harder for the GSM carriers to compete with those 2 (crappy service) carriers. Geez. I don't ever plan on switching from ATT and this news just sucks since getting LTE on a good carrier that doesn't suck will now take longer. Thanks DoJ you fools.
AT&T's network is ranked last among the major mobile companies: http://www.bgr.com/2011/08/29/att-network-ranked-worst-among-major-u-s-carriers-by-j-d-power/ That's one product of theirs that is worse than T-mobile's.
I was throwing some hard sarcasm in my statements but yes thank you we all realize ATT has a customer service perception dragging them down. However if you look at the statements made by the current owner of Tmobile about them no longer willing to invest in the US TMO business and the bleeding of customers you'll understand that in fact Tmobile NEEDS ATT to buy them up to save that network from failing. It's stated they made bad prior business decisions and the network is not viable in the long run. I hope the DoJ also considers those facts in the hearings coming soon because whether everybody likes it or not ATT and TMO need each other in the long run. With tmobiles great customer care and ATT's long term technology and business plans they would make a great competitor for VZW. Otherwise, we ATT users will have a long hard road of getting exactly what we want from our service.
I can see ATT "righting the ship" so to speak on their own without Tmobile but it will take greater time and some serious out of the box business decisions. ATT needs to drop LTE on the US like a MF'er with 100% network coverage and spend every penny they can to get it to every customer. That would be huge in changing perception. And lastly, ATT needs a complete overhaul of their customer care system. Although I'm a happy customer, I can see their faults and I know if I was running that division it would turned upside down within weeks to become a true standard in customer satisfaction.
I consider myself very pro capitalism. That being said I'm all for this move by the DOJ. As much as I hate what they have done on other issues. This one smacks a right in their wheel house. This has been and always will be about ATT eliminating a major competitor in the wireless industry. What ATT has said was all just a pack of lies and has been shown to be. Those 5K+ jobs to bring back is really just closing down the departments overseas. The calls then get redirected to the current departments in ATT. Costs will def go up either way. It was shown for that spectrum enhancement that they are paying a ridiculous premium for. Could be done for a 10th of the price they are paying. As far a choice of devices. If it wasn't for multiple carriers we would still be using bag phones. ATT got caught trying to pull a fast one on everyone. Sadly that money they spends buys a lot of pull down in DC.
AT&T lied about why they want to acquire TMo. Finally the Obama administration shows some guts. Let's hope they do everything in their power to block this highly anti-competitive manuever.
I bet you've been in the U.S. your whole life & you think the President's administration & the DOJ are on the same page!?! Hilarious! I need to start writing then.
Renee Ritche. Will u hip out ur big Canadian cock and masterbate for me and cum all over my titties. Thanks
Whoever thinks this is an example of anti-trust needs to go back to school! This merger would leave 2 CDMA carriers around, while the 2 GSM carriers combine. That means NO more complaints about AT&T's network + more choice (common-sense). I'm not sure why the government is trying to make it harder for consumers to make phone calls! They need to stay out of things they don't understand. Sprint must've done a lot of lobbying to get this verdict so quickly. I still think AT&T will get their merger, but the government is trying to hit them up for something (who knows). This is SO stupid!
You are delusional if you think this merger would be good for customers. Do you really think AT&T, a company that has the lowest-ranked wireless network, is going be better at deploying a network after buying T-Mobile?
Before you comment on here, at least read a book, a newspaper or Google the topic. It's 2011, almost '12, we shouldn't be this ignorant! A phone company/carrier merger is NOT the end of the world! Wake up!
But Comcast buying NBC Universal was OK???
Maybe the fact that one of the regulators involved in approving the Comcast deal left the agency within a year to take a sweet, highly overpaid executive position with the new company she allowed to be formed had some impact on this decision. Bribes weren't high enough. Yet.
Wow, iPhone users have some ridiculous views on business, typically...
AT&T Biggest Coverup of the Century. This will stop the AT&T T-Mobile merger in it's tracks.
AT&T stock holders will be lining up to sue AT&T executives involved CEOs and Presidents of AT&T finger prints are on it thousands of time.
Breaking story coming soon.