The Latest AT&T and T-Mobile Merger Developments

Casey BartoBack in March, the industry learned that AT&T was planning to purchase T-Mobile, a move that would leave only three major wireless carriers in the US.
Marketers and consumers speculated on the proposed deal’s impact on the mobile industry and on consumers, saying the availability of mobile coverage could expand and that consumers may see a price increase, among other things.

The speculation and chatter returned at the end of August when the Department of Justice attempted to block the deal, citing concerns that the merger would reduce competition in the wireless marketplace.

According to MSNBC, if the merger were to be completed it would leave “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services.”

Additionally, the Department of Justice states that T-Mobile and AT&T compete directly in 97 of the 100 largest cellular market areas in the country. “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,” said Deputy Attorney General James M. Cole.

The two companies can, however, challenge the Department of Justice in court, according to CNN. (The site also has an interesting graph of the nation’s wireless market share.) “If the merger is not approved, [AT&T] needs to pay a reverse termination fee of $3 billion to T-Mobile, and it has to forfeit several billion dollars more in wireless spectrum allotments,” explains CNN.

AT&T and T-Mobile are scheduled to appear before a US District Judge today for a hearing on the acquisition, according to Forbes, which has put together a look at the merger “by the numbers.”

Some interesting bits from the article include: There is a 30-40% probability that AT&T will succeed with the merger. If the merger goes through, AT&T and Verizon Wireless would control 76% of the US wireless market, leaving Sprint with 16%.

What are your thoughts on the Department of Justice’s move to block the merger? Share below!

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