Back in March, AT&T announced their plan to acquire T-Mobile USA, which spurred vehement opposition. Dan Hesse, the CEO of Sprint, didn't hesitate to let everyone know he thought it was a terrible idea. T-Mobile customers voiced their concerns, which stemmed from their dislike of AT&T. Well, T-Mobile customers and Hesse may have just gained a huge ally, as the US Department of Justice has filed court papers blocking the merger.
In its filing, the DOJ said, "AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market." If the deal falls through, AT&T faces paying T-Mobile parent company Deutsche Telekom a $3 billion break-up fee.
Update: AT&T has responded to the DOJ's filing, expressing "surprise and disappointment" --
We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.
We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.
At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:
· Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
· Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
· Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.
We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.
Source: Bloomberg; Thanks to everyone who sent this in!