Last week IT Business Edge's Carl Weinschenk wrote about the U.S. Department of Justice's lawsuit to halt the AT&T/T-Mobile merger, calling it a big win for consumers and noting that reading a statement from AT&T objecting to the lawsuit shows exactly why the merger shouldn't happen. He wrote:
AT&T actually was being very honest in its objection to the DoJ's move. Its fiduciary responsibility is to its owners and investors, not to citizens of the United States. To the extent that the two groups overlap, fine. But that is coincidental. There is nothing wrong with this-as long as everybody understands the ground rules. ...
Carl isn't the only one who doesn't think the proposed AT&T/T-Mobile deal would be good for consumers. Writing for FoxNews.com, John R. Quian lays out the numbers showing that consumers can save $20 to $50 a month by selecting T-Mobile rather than AT&T or number-two carrier Verizon. Quian also opines both AT&T and T-Mobile will be better off if the two companies don't succeed in fighting the DoJ's objections.
He makes a much more convincing case for AT&T, saying the telecommunications giant should focus on building rather than buying right now, an opinion that's echoed in a Wired blog post by John C, Abell. Writes Abell:
... It sure seems to me that the play here isn't to spend $39 billion to buy up someone else's property; It's to take that $39 billion, leverage that to the hilt and tell your shareholders that your laser-like focus will be to become the go-to source for mobile Internet access, and that you will do that by inventing, re-inventing and going where no one has gone before.
Unlike Quian, CNNMoney's David Goldman thinks T-Mobile could be in trouble if the DoJ successfully squashes the deal. T-Mobile was already strapped for cash and has mostly been waiting around for AT&T to take over the company since AT&T offered to buy it back in March. T-Mobile owner Deutsche Telekom clearly wants out of the U.S. market and won't invest in the 4G network that T-Mobile will need to remain competitive, Goldman writes. While there are a few other potential suitors, listed in the piece by Goldman, most would probably face significant hurdles in acquiring T-Mobile.
Implications actually may be greater for companies other than AT&T or T-Mobile, at least in the near term. According to a Bloomberg piece, the DoJ's move shows a change in the federal government's thinking regarding large, complex mergers in the telecommunications industry - or maybe any industry. The story quotes a couple of antitrust lawyers, one of whom calls the DoJ's objections "a line in the sand" and another who says it's "a significant shift in attitude toward telecom consolidation."
The collective opinion of experts quoted in the story is that the merger won't happen.