Sunday, March 20, 2011

USA - Merger of AT&T and T-Mobile (pre-empting a bid by Sprint) means only three big operators

[the economist] COULD this be the end of the line for T-Mobile USA? On March 20th AT&T, an American telecoms giant, launched an eye-watering $39 billion bid for its smaller competitor, which is owned by Germany's Deutsche Telekom.

If approved, the acquisition would leave America with only three sizeable operators in the wireless-telecom business: AT&T, Verizon and Sprint. For this reason, the deal is likely to meet stiff opposition from consumer groups and other telecoms firms, who worry that AT&T will use its extra muscle to crush competition further. A study by the General Accounting Office (GAO), an arm of Congress, found that America's four big wireless carriers already control 90% of the national market. Indeed, there had been much speculation that AT&T would buy a big company in a foreign market such as India rather than splash out at home, given the risks of a prolonged anti-trust investigation there. But rumours that Sprint was also sniffing around T-Mobile probably encouraged it to make its move.

AT&T bids for T-Mobile USA - A very big call

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