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Mon March 21, 2011
Bellevue-based T-Mobile and AT&T agree to merger
AT&T Inc. and T-Mobile want to merge. Boards of the mobile giants agreed to a $39 billion deal, announced Sunday, according to TechFlash reporter Greg Lamm:
The purchase, still subject to approval by regulatory boards, would create the largest mobile phone company in theU.S. If the deal closes, it would combine the nation's second- and fourth-largest wireless carriers, creating a company with nearly 130 million subscribers, and could lead to higher rates for consumers, experts said.
Lamm writes that until quite recently T-Mobile, the Seattle area's remaining major wireless firm, was considered to be in merger talks with Sprint Nextel.
The merger is expected to get a high level of scrutiny from regulators in Washington D.C., according to the New York Times' Dealbook blog:
“Consumers have borne the brunt of the increasingly concentrated market for mobile phone service,” Senator Herb Kohl, the Wisconsin Democrat who heads the subcommittee on antitrust, competition policy and consumers rights, said in a statement. “The explosion ofcellphoneusage — especially smartphones — makes competition in this market more important than ever as a check on prices, consumer choice and service.”
Last year was the first time the FCC did not say there was "effective competition" in the wireless communications market, according to the Wall Street Journal's Spencer Ante and Amy Schatz:
Herbert Hovenkamp, a University of Iowa law professor and antitrust specialist, said the deal would also have a hard time meeting new merger guidelines recently issued by the Department of Justice. "It's a pretty highly concentrated market," he said. "The guidelines would say this is a highly questionable merger unless there is a significant provable efficiency."
In a corportate statement, AT&T detailed their interests in the deal:
With this transaction, AT&T commits to a significant expansion of robust4GLTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns.
On its website, T-Mobile provided some answers, in the form of a FAQ.