You might have heard about AT&T’s proposal to purchase T-Mobile USA back in March. There has been a lot of debate regarding whether or not this move should be allowed, and now Bloomberg reports that the US Government is filing an anti-trust complaint to block the merger.
According to the complaint, the deal is anti-competitive in nature, and would “substantially lessen competition” in the wireless market. AT&T shares have already falled 5% as a result of the complaint. The complaint goes on to state that “AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market.”
Of course, the complaint has a lot of merit – AT&T has engaged in anti-consumer practices time and time again, and have consistently raised prices while decreasing quality of service. T-Mobile’s lower-priced cellular network stands as significant competition as a result, and will be able to compete even more if rumors regarding the iPhone 5 coming to T-Mobile turn out to be accurate.
If successful, the merger would make AT&T the largest wireless carrier in the US. If rejected, AT&T would have to pay Deutsch Telecom, T-Mobile’s parent company, $3 billion in cash, as well as reducing charges for calls that enter AT&T’s wireless network.
Thanks, Uncle Sam – A bigger, stronger AT&T is the LAST thing we need. Way to protect the people.