Bloomberg has just reported that U.S government has filed an antitrust complaint to block AT&T from acquiring T-Mobile USA.
AT&T – the largest carrier in the US had announced plans to acquire T-Mobile USA – fourth largest carrier for a whopping $39 billion in stock and cash.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
The acquisition was expected to help AT&T and T-Mobile to improve the voice quality thanks to the increased cell tower density and broader network infrastructure, especially AT&T whose customers have often complained about poor network coverage. But at that time Om Malik of GigaOM network had raised concerns about the acquisition as he believed that customers would be the biggest losers. He wrote:
The biggest losers of this deal are going to be the consumers. While AT&T and T-Mobile are going to try to spin it as a good deal to combine wireless spectrum assets, the fact is that T-Mobile USA is now out of the market.
T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans as it has tried to compete with its larger brethren. The competition has kept the prices in the market low enough. This has worked well for U.S. consumers. With the merger of AT&T & T-Mobile, the market is now reduced to three national players – AT&T, Verizon and Sprint. Net-net U.S. consumers are going to lose.
The U.S government seems to agree. It will be interesting to see if T-Mobile gets iPhone 5, as it was only last week that we heard rumors that the fourth largest carrier will finally be offering Apple’s iPhone.
Are you glad that the AT&T – T-Mobile USA merger has been rejected? Please share your views in the comments below.