AT&T and T-Mobile USA merger to face regulatory scrutiny

The biggest news this weekend was the announcement of the proposed acquisition of T-Mobile USA by AT&T from Deutsche Telekom for $39 billion. The deal is conditional on regulatory approval, and I’ll be watching with interest as the other US mobile networks seek to gain advantage through the regulatory process.

AT&T is the second largest US network and T-Mobile USA the fourth. AT&T’s announcement emphasises the positive aspects of the merger, saying that the merger:

  • Enhances network capacity, output and quality in near term for both companies’ customers
  • AT&T commits to expand 4G LTE deployment to an additional 46.5 million Americans, including in rural, smaller communities, for a total of 294 million or 95% of the U.S. population
  • Provides 4G LTE service for T-Mobile USA’s 34 million subscribers
  • More than $8 billion in incremental infrastructure spend by a U.S. company over seven years, enabling nation’s high-tech industry, innovation and economic growth
  • Creates substantial value for AT&T shareholders through large, straightforward synergies

However, based on the experience of other markets (cf creation of Everything Everywhere by the merger of Orange and T-Mobile in the UK) their competitors will likely argue that the deal reduces competition and that the combined entity should divest some of its spectrum. I’ll follow the debate with interest.

A quick look forward to tomorrow’s post – the UK’s Competition Appeal Tribunal hands down judgment in the PPC Appeal at 9 am tomorrow. Among the issues the judgment is expected to address is how a SMP cost-orientation obligation is to be applied in practice.

About Rob Bratby

Telecommunications, media and technology lawyer advising companies across Europe and Asia
This entry was posted in Commercial activity, Mobile, Regulatory action, Telecoms, US and tagged , , , . Bookmark the permalink.

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