Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Iraq's Christians - Nowhere to Run? (part 2)

Read more

DEBATE

Iraq's Christians - Nowhere to Run?

Read more

MEDIAWATCH

Towards a "Third Intifada"?

Read more

FOCUS

What solutions for California's overcrowded prisons?

Read more

MIDDLE EAST MATTERS

Gaza conflict: Palestinians mark sombre Eid

Read more

WEB NEWS

Celebrities in the Israel-Gaza crossfire

Read more

IN THE PAPERS

Israeli strike takes out Gaza power station

Read more

IN THE PAPERS

French newspaper apologises for Sarkozy story

Read more

BUSINESS DAILY

Last-ditch talks aim to avert Argentina default

Read more

  • Deadly strike hits Gaza market despite four-hour 'truce'

    Read more

  • Fourth female suicide bomber targets Nigerian city

    Read more

  • Russia defiant as US, EU unveil 'phase three' sanctions

    Read more

  • US rebounds to 4% growth in second quarter

    Read more

  • Suspect in Jewish Museum attack charged with 'terrorist' murder

    Read more

  • Women should not laugh in public, Turkey's deputy PM says

    Read more

  • Video: Coping with rocket attacks in Israel’s Sderot

    Read more

  • Rats on the rampage at Louvre museum gardens

    Read more

  • France evacuates nationals, closes embassy in Libya

    Read more

  • Dozens killed in stampede at Guinea rap concert

    Read more

  • 'Compelling' signs Kosovo leaders trafficked organs, prosecutor says

    Read more

  • Graphic: Ebola spreads across West Africa

    Read more

  • Video: How tourism is helping Rwanda’s gorillas, ex-poachers

    Read more

  • Islamists seize key Benghazi army base as fire rages on

    Read more

  • In pictures: ن - a sign of support for Iraq’s persecuted Christians

    Read more

Business

AT&T's T-Mobile buy under scrutiny

Text by News Wires

Latest update : 2011-03-22

AT&T will probably need to sell major assets to win US government approval for its $39 billion purchase of T-Mobile USA from Deutsche Telekom, but CEO Randall Stephenson (pictured) said Monday he was "very confident" the deal would be approved.

AFP - AT&T's $39 billion acquisition of T-Mobile USA is going to be put under a microscope by US anti-trust authorities but the telecom giant is certain it will stand up to examination.
              
"We're very confident it will be approved," AT&T chief executive Randall Stephenson said Monday of the deal that would allow AT&T to leapfrog Verizon Wireless and become the biggest US wireless provider.
              
Investors also gave it the thumbs-up on Monday. AT&T shares were up 1.2 percent at $28.26 on Wall Street at the close and shares in T-Mobile USA owner Deutsche Telekom soared by 11.3 percent in Frankfurt.
              
In a sign of the confidence AT&T has of getting the green light from the Federal Communications Commission (FCC) and the Department of Justice, the transaction carries an exceptionally high "breakup fee" of $3 billion.
              
AT&T would also be required to hand over assets if it falls through.
              
The FCC and Justice Department will not be the only ones examining the deal.
              
Members of the US Congress immediately pledged to take a close look at the takeover of the fourth-largest US wireless provider by the second-largest.
              
"Consumers have borne the brunt of the increasingly concentrated market for mobile phone service," said Senator Herb Kohl, a Democrat from Wisconsin who chairs the Antitrust, Competition Policy and Consumer Rights Subcommittee.
              
"The explosion of cellphone usage -- especially smartphones -- makes competition in this market more important than ever as a check on prices, consumer choice, and service," Kohl said.
              
"That's why the Antitrust Subcommittee will take a close look at what this loss of competition will mean for people who increasingly rely on wireless phone service to connect to friends, family and the Internet."
              
Senator Jay Rockefeller, a Democrat from West Virginia who chairs the Senate Commerce Committee, said "it is absolutely essential that both the Department of Justice and the FCC leave no stone unturned in determining what the impact of this combination is on the American people."
              
Citadel Securities' Shing Yin was one of the few financial analysts to criticize the deal, calling it "strategically unnecessary for AT&T."
              
"We feel $39 billion could be better spent acquiring spectrum and building out (next-generation mobile broadband) more aggressively," Yin said.
              
Most financial analysts said they expected the deal to survive regulatory review but Yin was not so sure.
              
"We cannot speak for the regulators, but we do not believe regulatory approval is a foregone conclusion," Yin said. "We expect a lengthy, contentious review process with potentially significant concessions required."
              
Opponents were quick to criticize the deal.
              
Gigi Sohn, president of Washington-based public interest group Public Knowledge, said combining AT&T and T-Mobile USA is "unthinkable."
              
"The wireless market, now dominated by four big companies, would have only three at the top," Sohn said. "We know the results of arrangements like this -- higher prices, fewer choices, less innovation."
              
Verizon currently holds a 31-percent share of the US wireless subscriber market followed by AT&T with 27 percent.
              
Adding T-Mobile's 37.3 million customers would give AT&T a 39-percent share of the market, putting it ahead of Verizon and current number three Sprint, which had also expressed interest in acquiring T-Mobile.
              
US anti-trust authorities took four months to approve the last big merger in the US telecom sector -- Verizon's $28.1 billion acquisition of mobile phone operator Alltel.
              
Under an agreement with the Justice Department, Verizon agreed to divest some operations and AT&T, which is hoping to close the T-Mobile deal within a year, could be forced to do the same.
              
But the company said Monday it believes the US wireless carrier space is among the most competitive in the world, with five operators or more in 18 of 20 major markets.

 

Date created : 2011-03-22

  • TELECOMMUNICATION

    Twenty-four mobile operators link up for single platform handset deal

    Read more

  • TELECOMMUNICATION

    Motorola to split into two companies in 2011

    Read more

  • TELECOMMUNICATION

    Ericsson win 1.3 billion dollar Indian upgrade contract

    Read more

COMMENT(S)