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Sprint sues AT&T claiming its buyout of T-Mobile USA is illegal

Joins the DoJ in turning up the heat
Wed Sep 07 2011, 14:44

US TELECOMS OPERATOR Sprint has filed a lawsuit against AT&T claiming that its plan to buy T-Mobile USA is illegal.

Since AT&T announced its decision to buy Deutsche Telekom's T-Mobile USA operation there has been uproar that it might result in decreased consumer choice, leading to increased prices and poor service. AT&T claims the $39bn merger will help it provide more capacity but neither customers nor the US Department of Justice (DoJ) are convinced.

AT&T took the aggressive move of suing law firms that were representing its customers that opposed the purchase. The DoJ then sued AT&T claiming, "AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market."

Adding to AT&T's woes is rival telecoms firm Sprint, which has filed a lawsuit against AT&T focusing on the "competitive and consumer harms which would result from a takeover of T-Mobile [USA] by AT&T".

Sprint alleges that the proposed deal is illegal, claiming it would "entrench the duopoly control of AT&T and Verizon", the two 'Ma Bell' descendants, and that the two firms would make up 90 per cent of the wireless industry's profit.

Not surprisingly Sprint said the deal would harm itself and other independent firms and made the valid point that a company of such dominant size would be able to exert excessive influence on the backhaul, spectrum and roaming access markets.

If AT&T's bid to acquire T-Mobile USA falls through, it will have to fork over $3bn to Deutsche Telekom. At the moment it is looking far more likely that Deutsche Telekom will make $3bn for absolutely nothing than that AT&T will get its hands on T-Mobile USA. µ

 

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