AT&T says T-Mobile deal is good for customers

Washington: AT&T Inc. said its proposed $39 billion (Dh143.13 billion) acquisition of T-Mobile USA Inc. is good for mobile-phone customers and that the US lawsuit seeking to block the deal "fails to come to grips" with its benefits.

AT&T filed its response yesterday to the US Dep-artment of Justice's (DOJ) complaint in federal court in Washington. The company said the merger would lead to better service, fewer dropped calls and lower prices for consumers. AT&T cited fierce competition from Verizon Communications Inc., Sprint Nextel Corp., MetroPCS Communications Inc., Leap Wireless International Inc., US Cellular Corp. and Cellular South Inc.

"The Department does not and cannot explain how, in the face of all these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation," AT&T said in the filing.

Call for solution

AT&T described T-Mobile as "the only major carrier to have actually lost subscribers in a robustly growing market" with a business model that has it trapped between large providers and lower-priced competitors.

The Department sued Dallas-based AT&T and Bonn- based Deutsche Telekom AG's T-Mobile unit on August 31, saying a combination of the two companies, which would make AT&T the biggest US wireless carrier, would "substantially" reduce competition.

Mike Balmoris, an AT&T spokesman in Washington, said in an e-mail that the company remains "interested in a solution that addresses the DOJ's issues with the T-Mobile merger."

The company said in the filing that the government's characterisation of AT&T, T-Mobile, Verizon and Sprint as the "big four" is misleading because the Federal Communications Commission recently reported that 90 per cent of US consumers have at least five wireless providers to choose from.

Settlement options

AT&T also added new lawyers to the case. Mark Hansen of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC in Washington filed yesterday as lead counsel.

Hansen, who has previously represented AT&T, Verizon, General Electric Co. and Morgan Stanley, declined to comment on the filing or his status as lead counsel.

Hernan Daguerre, a T-Mobile spokesman, declined to comment on the filing. "This transaction as currently proposed is anticompetitive and harmful to consumers," Gina Talamona, a spokeswoman for the antitrust division of the Department, said in an interview. "We will respond further in our court filings."

US District Judge Ellen Segal Huvelle has set a hearing for September 21 and told the parties to be prepared to discuss settlement options.