Apple iPhone users, eagerly awaiting the extra bandwidth from AT&T’s purchase of T-Mobile may have to tighten their belts. The U.S. Department of Justice Wednesday filed an antitrust lawsuit, blocking approval of the $39 billion deal on grounds it will “substantially lessen competition.”
“AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” DOJ attorney’s argue. No. 3 Sprint had argued combining AT&T and T-Mobile would hurt the smaller carrier’s profits.
Investors reacted to the news, pushing AT&T shares down 96 cents to $28.66 in early trading on Wall Street, Bloomberg reports. If the deal is rejected, Deutsche Telekom – parent of T-Mobile – reportedly receives $3 billion in cash from AT&T, along with some wireless spectrum and discounts on AT&T network usage worth up to $7 billion. Clearly, with a payout like this for a failed deal, both AT&T and T-Mobile knew there was a good chance the government would try to stamp down on this deal.
Because T-Mobile and AT&T shared the same type of GSM and UMTS/HSPA networks, iPhone users saw the deal as potentially offering a faster network and more stable coverage. Now, though, it looks less likely than ever that anyone will be getting a bill from AT&T-Mobile anytime soon.
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.
14 responses to “US Government Moves To Block AT&T / T-Mobile Merger With Antitrust Lawsuit [Breaking]”
GOOD!
Boy if this doesn’t go through for AT&T, I wonder if they’ll be going back on there decision to up the price of text messaging on iPhones into oblivion? Especially with Sprint and supposedly T-Mobile scheduled to launch and iPhone, if not this year then soon.
AWESOME!
We don’t need a GSM monopoly owned by AT&T.
Maybe Apple will buy T-Mobile? :-)
So lets say eventually T-Mobile files for bankruptcy what now? All their creditors and shareholders are screwed and all of T-Mobiles assists / customers get sold to…. guess who? I think AT&T (or anyone else) buying out T-Mobile is a good solution for an industry that cannot support so many competitors (in the US due to our stupid Cell Phone market where every carrier has to build out their own network unlike other countries where competition is all about service provided not the network technology). This is very similar to other high capital industries like Satellite TV / Radio where its almost impossible for the market to support more than 2 competitors.
Consumers don’t need a GSM monopoly.
Even if most consumers don’t understand the benefit to them.
I left t-mobile and to verizon because of this deal. ATT is scum. Any compay that provides the government unauthorized access to private public communication is guilty of participating in unwarranted search and seizure. If laws won’t protect the public from this behavior then it is the consumers responsiblity.. But it’s hardly going to happen when all anyone can think about is the technology.
Those people will like it are stupid and moron…the merger!
I had AT&T but all headache about bill and services…
I have 4 lines with unlimited worldwide messaging (txting, picture messaging & video messaging), 1000 minutes, unlimited 4g speed with employee discounts (I’m a nurse anesthetist) for only $125-$130/month that’s includes tax & all fees…
With AT&T for the same plan – I’ll spend $200-$220/month…
I’m not living in the boondocks, so signal in the whole Austin, Texas is amazing…
Stop the merger…