Turmoil surrounds the proposed takeover of Deutsche Telekom’s US division T-Mobile by AT&T as the US government moved to block it.
Washington believes a merger would harm competition in the US mobile phone market and lead to higher prices.
If AT&T and Deutsche Telekom want to try to go ahead with the deal they will have to go to court — a process that could take years and cost millions.
Deputy US Attorney General James Cole explained why they oppose America’s largest mobile phone company – AT&T – taking over the fourth largest T-Mobile: “Were the merger to proceed, there would only be three providers with 90 percent of the market, and competition among the remaining competitors on all dimensions, including price, quality, and innovation, would be diminished.”
The takeover had been opposed by AT&T’s rivals — Verizon Wireless and Sprint Nextel.
Sprint, the third biggest mobile operator in the US, has complained loudest saying the deal had “no public interest benefit”.
If the takeover does not go ahead it would be a major setback for Deutsche Telekom, which has been looking for a way out of T-Mobile USA for years. It plans to fight the US government move along with AT&T.