In an odd bit of trash talk aimed at itself, AT&T replied to a Department of Justice objection to the acquisition of T-Mobile USA, the Dallas-based carrier saying T-Mobile is tiny and unlikely to be upgraded by its German parent. Additionally, AT&T said it has spent $30 billion upgrading its network between 2008 and 2010 and customers are still complaining.
AT&T’s legal team believes the government complaint “reflects a misunderstanding” of the cell phone market, the Associated Press reports. While the Department of Justice lawsuit charges the $39 billion deal would hurt competition, AT&T’s 25-page response downplayed the danger to competitiveness, claiming going ahead with the acquisition would improve cell service amid growing demand for data.
The carrier rejects the idea that snapping up T-Mobile would hurt competition, because there isn’t any. AT&T told the U.S. District Court in Washington, DC that No. 4 T-Mobile, with 33.6 million customers, is no match for the No. 2 carrier’s 100 million subscribers. In any event, Germany’s Deutsche Telekom isn’t likely to sink more money in its U.S. carrier, already shedding market share.
Then in a legal move only fathomable by AT&T’s attorney, the carrier essentially told the court: ‘hey, our wireless service sucks, but if we buy T-Mobile, it’ll get better.’ The carrier also sweetened the deal by promising to spend $8 billion and bringing $5,000 call center jobs now done out of the country, back home.
Aside from the egg it’ll have on its face if it loses in court, AT&T will also be on the hook to T-Mobile to the tune of $3 billion if the acquisition fails. The next hearing is scheduled for Sept. 21.
