U.S. Justice Department Brings AT&T’s Effort to Merge With T-Mobile to a Halt

In an attempt to boost ranking from the #2 wireless carrier in the country to #1, AT&T’s deal to buyout the #4 wireless carrier (T-Mobile) for $39 billion dollars was blocked by the Justice Department on grounds that it would drastically increase prices for consumers. Deputy Attorney General James Cole said the merger would result in “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services.” But AT&T is not ready to back down just yet since they do have the opportunity to face the Justice Department’s block in court.

Either way things do not look too good for T-Mobile who is already having trouble competing with the other large wireless carriers. If the deal is passed, AT&T will own T-Mobile and if it doesn’t pass, AT&T has still agreed to provide T-Mobile with $3 billion dollars, but T-Mobile’s owner Deutsche Telekom AG has made it clear that it’s not willing to invest any more in the venture. The Justice Department’s lawsuit claims that allowing this deal to go through would eliminate a company that for a long time standing has been a top competitor with low pricing and innovative technology.

The Justice Department has also combatted AT&T’s merger with T-Mobile by presenting T-Mobile’s own documents stating their relevance and key role in the market among large carriers. But AT&T and T-Mobile both claim that the merger would benefit, not hurt the consumer for the reasons that there would be fewer dropped calls, blocked calls, and faster mobile internet connection. As for now, it looks as if the Justice Department has the upper hand and backing from Sprint, the #3 wireless carrier, and a bulk of consumers.

For more information visit: www.forbes.com



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