Deal threatened

The US Justice Department announced on Wednesday that it would launch a bid to block the takeover of T-Mobile USA by the American telecommunications corporation AT&T.

The Justice Department said it had filed a lawsuit in a US District Court in Washington opposing the $39-billion (27-billion-euro) merger on the grounds that it would hurt competition.

"We are seeking to block this deal in order to maintain a vibrant and competitive marketplace," Deputy Attorney General James Cole told reporters at a press conference.

He added that if the takeover, which was agreed between Deutsche Telekom and AT&T back in March, went through, it would result in the removal of an "aggressive player" from the market which in the past had helped keep prices down for the consumers.

Protecting consumers' interests

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Cole.

"Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers," he said. "This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."

AT&T general counsel Wayne Watts said the telecommunications giant would challenge the Justice Department's action in court.

"We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed," he said. "The Department of Justice has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court."

AT&T says it needs to complete the deal to allow it to add needed capacity.

If the takeover bid does go through, it will leave just three mobile phone service providers operating nationally in the United States.

Verizon is the market leader with 31 percent of the US market, followed by AT&T with 27 percent and then Sprint. By acquiring T-Mobile's 37.3 million customers, AT&T would become the market leader with a share of around 39 percent.

The Federal Communications Commission is also examining the deal, but has not yet reached a decision.

Author: Chuck Penfold (dpa, AFP, Reuters)
Editor: Martin Kuebler