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.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
10 responses to “AT&T to Justice Dept.: T-Mobile Deal Will Provide Cheaper Cell Phone Service”
BS
Throwing everything at the wall to see what sticks. I can smell this Washington BS in Texas.
I’m actually surprised that they didn’t just that DTK is selling because they intend to get out of the US no matter what, so 3 major carriers is a point of fact at this moment.
T-mobile couldn’t make it in the US in part because if US laws that wouldn’t let them operate on the same 3G bandwidth as ATT and in truth not that many folks are going to jailbreak their iPhones etc to be on EDGE only compared to the folks that will bend over and ATT stick it to them.
Not to mention simply the laws that allow carriers to lock in hardware even after a consumer’s contract was completed.
I say let them have the towers that are in areas where they don’t already have any, the overlap goes to the next highest bidder. Let them have the contracts but require them to keep the terms as they are for the next five years. Require them to allow smaller carriers to roam on their system on preset terms including prices for a set period, say 3 to 5 years. Or at least require that all such actions be reviewed by the court before they can take place.
Fuck AT&T. Stop data at 2GB. That’s fucking stupid.
i agree with most of you,, ATT will not lower cost, thats just not what they do,, i see a tmobile merger as just another corporate attempt to lie to the gov,, once the deal is done,, then back petal and say they couldn’t follow through with lower cost because of “competition” I hope washington can see through this mess,,,
Only one flaw in that argument, AT&T was a smaller company until iPhone came along and bam-huge increase in subscribers. In a little over a month the iPhone will be available to T-Mobile…better buy up T-Mobile stocks now cause I see a major change for them in October.
Sure and pigs will learn to fly too. AT&T is full of shit.
I’d love to believe that this would lower costs, but the whole tethering thing makes me doubt it will happen. $20 for using something you’re already paying for?
Then again, if they keep their costs the same while speeding up their network, I’ll be a happy camper.
Well, this seems to be a simple ‘put your money where your pie hole is’ moment…the judge could tell the hillbilly faction from Texas, ‘OK smart guys… I’ll let the deal go forward IF you guarantee, in writing, that you will REDUCE wireless pricing, for ALL customers, by 30% by July 1, 2012.
Yes or no…..you pick.
Excited to see the merger happen, and it will. Check the coverage maps from both. This will tie it all together. Especially NY and California, where people have been bitching the most. As for the 2 GB cap, this is all new to everyone. In a few years we’ll see the caps go higher or lift completely, once the tech catches up to itself.