News reports just hit the wire that the US Justice Department is taking action to oppose the mega merger of AT&T and T-Mobile.
“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 Deputy Attorney General James M. Cole.
The primary reasons appear to be fiscal – T-Mobile creates a low-cost third party option to the two large wireless rivals AT&T and Verizon, and innovative – referencing T-Mobile’s extensive high speed network and their industry-leading acceptance of Android and use of Blackberry’s wireless email.
“AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” the complaint said. “Thus, unless this acquisition is enjoined, customers of mobile wireless telecommunications services likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger.”
Sprint has been a major voice in calling for opposition to the merger. As of the announcement, Sprint Nextel stock was up 6% while AT&T’s was down 4%. Only time will tell how the markets react long term to the attempted block, and how it will impact business and personal wireless consumers. But it certainly bears watching…