AT&T seeks to offload subscribers, spectrum to rivals to smooth path for T-Mobile takeover

21 Sep 2011

US wireless giant AT&T has reportedly made approaches to a number of smaller rivals – including MetroPCS and Leap Wireless – with a view to selling off surplus spectrum, and even parts of its subscriber base. According to Bloomberg the move forms part of AT&T’s strategy to rescue its controversial USD39 billion takeover of T-Mobile USA. Citing two people with direct knowledge of the situation, it has been reported that AT&T also reached out to CenturyLink, Dish Network and Sprint Nextel, to gauge their interest in buying some of its assets. As previously reported by TeleGeography’s CommsUpdate, late last month the US Department of Justice (DoJ) filed a civil antitrust lawsuit to prevent AT&T from acquiring T-Mobile from Germany’s Deutsche Telekom. At the time Deputy Attorney General James M Cole commented: ‘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 … This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition’.

Last week, AT&T responded to the DoJ lawsuit by arguing that T-Mobile is too insubstantial to be a truly effective competitor, and its removal from the market would not actually harm consumers. AT&T’s federal court filing explained: ‘T-Mobile’s business model remains stuck in the middle between larger providers like Verizon, AT&T and Sprint, and lower-priced competitors like MetroPCS and Cricket. Blocking this transaction will not help T-Mobile or its customers, but the transfer of T-Mobile’s network capacity and infrastructure to AT&T, a healthy competitor, will enhance competition for all, now and in the future. T-Mobile is not a unique or material competitive constraint on AT&T. T-Mobile has not been a meaningful or unique innovator in terms of network development and deployment, nor is it likely to become one in the foreseeable future’.

United States, AT&T, AT&T Communications, AT&T Wireless (Defunct), T-Mobile US