Thursday, September 8, 2011

AT&T and T-Mobile USA Defend Merger Efficiencies

AT&T and T-Mobile USA filed a response in U.S. District Court to the Department of Justice's lawsuit that seeks to block their proposed merger.

In a 27-page filing, the carriers argue that the DOJ failed to appreciate how the efficiencies of the acquisition would lead to a healthier market for advanced wireless services, that the DOJ failed to understand the competitive dynamics currently at play in this industry, and that the DOJ failed to appreciate how the spectrum shortage they now face will lead to higher prices should their merger not go forward.

AT&T notes that T-Mobile USA has been losing customers, lacks the spectrum to deploy a true 4G network, and its parent company is unwilling to invest the funding needed to make it a viable competitor in the long term.

In conclusion, the carriers state the "efficiencies more than outweigh any anticompetitive effect from this merger."

  • The Department of Justice lawsuit, which was filed August 31, seeks to block AT&T’s acquisition of T-Mobile on the grounds that the deal would result in "tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services." In its conclusion, the DOJ said it was not convinced by AT&T's arguments that the proposed transaction would yield efficiencies benefiting consumers and outweighing adverse impacts on competition. The key finding was that AT&T could achieve the same network power and reach by deploying its own infrastructure rather than by eliminating a competitor.

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