AT&T and T-Mobile Merger

AT&T and T-Mobile Merger

Introduction

AT & T and T-Mobile knew the situation wrong. In fact, just yesterday had offered to lead America 5,000 jobs and call center in an attempt to sweeten the purchase of T-Mobile and move with it to his Government. But the government has been relentless. After evaluating the proposed merger between AT & T, the largest U.S. operator and second in Mobile, and T-Mobile, the country subsidiary of Deutsche Telekom and U.S. ranking fourth cell, has decided to block it. In his view, the multi-operation announced last March (27,000 million it cost AT & T) "is substantially detrimental to competition" in the mobile market and violate antitrust law. No wonder the union of the two would create the leader in mobile telephony in the country, ahead of the current number one, Verizon.

Complaint in federal court

Therefore, the Department of Justice has filed suit in federal court in Washington that calls for blocking the operation. "The disappearance of T-Mobile as a rival independent and low prices would remove a significant competitive force in the market," the government argues in its application. The final verdict is now in the hands of the telecommunications regulator, which has advanced to have misgivings about the operation, but has not yet decided. This movement is a strong blow to AT & T, which had in its plans with the giant leap to assume he was going to be with customers and the T-Mobile. But no one knows who is harder for the news, whether for buying or for selling, Deutsche Telekom (Krugman & Wells, 2006).

Sharp fall in stock

And is that the German operator has spent years with the headache of deciding what to do with a subsidiary that has gotten out of hand and requires much investment to the level of competition that lies ahead in America. So it was no wonder that the fall in the stock market after the news was superior to Deutsche Telekom (7.64% down at closing), which AT & T (-3.85% in the day).

Of course, Deutsche Telekom had hedged its bets and signed the sale agreement that AT & T would pay 3,000 million dollars (about 2,080 million euros) in case the operation with T-Mobile did not receive approval from the authorities regulatory. AT & T also will provide T-Mobile spectrum in certain regions and lower gas prices it charges for using their network conditions valued at 7,000 million dollars (4850 million).

The U.S. Department of Justice believes that this merger will penalize the consumer and therefore filed an appeal. To complete the merger, concessions must be made. The mega-merger in the U.S. mobile announced in March last part is wrong. The acquisition of T-Mobile USA, a subsidiary of the German Deutsche Telekom by AT & T for an amount colossal $ 39 billion is anti-competitive in the eyes of the Department of Justice. It hired a legal process to block the sale. "Unless the merger is blocked, competition and innovation will be reduced, and consumers will suffer" ...