Reject AT&T’s T-Mobile acquisition, says Consumer Watchdog

10 August 2011 | Kavit Majithia


AT&T’s long-running bid to acquire T-Mobile USA hit another setback yesterday after the US public-interest group Consumer Watchdog said the bid should by rejected by regulators.

AT&T’s long-running bid to acquire T-Mobile USA hit another setback yesterday after the US public-interest group Consumer Watchdog said the bid should by rejected by regulators.

Citing the proposed $39 billion deal will mean high prices for the consumer, Consumer Watchdog stated in an open letter “T-Mobile customers who are forced to migrate to AT&T’s network will have to buy new phones, agree to more expensive rate plans or cancel their contracts and pay a termination fee.” The letter continued: “Once known for its low prices, T-Mobile has already begun increasing its rates and decreasing options in anticipation of the merger.”

The deal was originally proposed on March 20 2011, and still appears no closer to reaching a resolution. According to an email response, reported by Bloomberg, AT&T hit back and said the Watchdog’s claims is “riddled with distortions and factual inaccuracies”. The company went on to state the market is, and will remain, “extremely competitive”.
 
The FCC has since confirmed it will coordinate the investigation of both AT&T’s proposed acquisition of T-Mobile and its bid to acquire spectrum worth $1.9 billion from Qualcomm.

The decision by the federal regulator is a further setback to the US telco, and will mean it will further delay the completion of 700MHz spectrum from Qualcomm. The ruling comes after calls from rivaling Sprint Nextel and other Tier 2 US operators, which requested the FCC review both deals together because of AT&T’s potential dominant position in spectrum.

An “ongoing review has confirmed that the proposed transactions raised a number of related issues, including but not limited to, questions regarding AT&T’s aggregation of spectrum throughout the nation,” said an FCC letter to AT&T and Qualcomm.
According the Financial Times AT&T does not believe the two deals should be put on a parallel review, but is confident that both transactions will be approved.