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August 31, 2011

DOJ files to block AT&T T-mobile deal

Filed under: General,Random Thought — Tags: , — Nate @ 7:49 am

Wow, I didn’t expect the government to do this, hopefully it sticks, but apparently the DOJ  has filed to block the merger between T-mobile and AT&T. Just a couple of hours ago some AT&T exec was on CNBC touting how good of a deal it was, how they’d bring back jobs etc, I couldn’t bring myself to watch or listen to him talk.

What I’m sure they didn’t mention was the leaked emails showing the public AT&T position was pretty much the exact opposite from what they were portraying internally. Some folks did calculations and determined that actual investment was going to go down with AT&T buying T-mobile, rather than up (don’t have a reference for that handy right now).

I didn’t like the deal to begin with of course, so hopefully it’s dead, and T-mobile will get a few billion in break up fees as a result (and some free spectrum! I forgot about the spectrum AT&T has to give them). I know some folks at T-mobile apparently internally they were convinced it was going through, and already started doing a bunch of stuff to prepare for it.

I can’t believe that some folks believe that actual investment would go down if the deal was blocked, in fact the same Wall street investors are buying up shares of cell tower companies like American Tower in response to the DOJ deal, speculating that investment will go UP. AT&T and T-Mobile of course will have to continue to invest regardless, it’s not as if AT&T is going to stop spending if they don’t get T-mobile, they still have to compete against the other carriers in the space.

The DOJ said in a speech earlier this morning, among other things:

As can be seen in the Department’s complaint, AT&T felt competitive pressure from T-Mobile.   One example cites an AT&T employee observing that “[T-Mobile] was first to have HSPA+ devices in their portfolio…we added them in reaction to potential loss of speed claims.”

Combine that kind of claim with the leaked emails and a little bit of common sense and it’s not hard to see how this deal would hurt consumers. Now there’s speculation again that Sprint may go after T-Mobile. I kind of hope they don’t, since their technologies are not compatible (CDMA & GSM). The Sprint Nextel deal was a real mess I think in good part because the handsets and networks were not compatible.

AT&T will have to rely on organic growth it seems – oh no, the world is coming to an end.

I say this as a new AT&T customer – somewhat forced to take the leap off of Sprint (after being with them for 10 years) onto AT&T in order to get GSM service so I can run more WebOS phones including the Pre3 by swapping SIM cards between phones.


  1. Actually, Sprint + T-Mo might make sense in a few years, since I believe both are committed to LTE. But, I’m hoping both can make it on their own, along with Clear.

    Comment by Tony — August 31, 2011 @ 9:54 am

  2. ahh that is an interesting angle — BUT it’s my understanding LTE is only being used for data while voice is going to remain 3G for the most part? Though if the radios can be improved to the point where battery life is comparable to 3G…

    Comment by Nate — August 31, 2011 @ 10:01 am

  3. Likewise, I’m surprised the DOJ actually took action. I too hope the deal falls through, being a t-mobile customer and a previous at&t customer, a merger can only mean bad things for t-mobile customers and for the cel phone market in general.

    Unfortunately, since t-mobile and sprint use different technologies, a merger between the two is unlikely, even if they both support LTE roadmaps. If they merged and combined their spectrums, it would be great for LTE, but it would also mean phasing out existing devices. Though nothing prevents them from using one part of the spectrum for voice and the other for data, or vice versa, allowing existing devices to work, but also allowing for future devices to make use of the extra spectrum.


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