AT&T;, T-Mobile file with FCC, Sprint fires back |
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AT&T;, T-Mobile file with FCC, Sprint fires back
And now, the latest chapter in the war of the mobile worlds. Yesterday, AT&T; filed its application to acquire T-Mobile with the FCC. If approved, the $39 billion deal would make AT&T; the country's largest wireless carrier. Rival Sprint, which has openly criticized the merger, immediately responded that the deal would "strangle competition" and threaten American jobs.
In the filing, AT&T; attempted to explain how the merger would benefit customers and the wireless industry, while also (finally) admitting that its network was challenged by the explosive use of the iPhone.
The 381-page filing has been a source of amusement for many. In it, AT&T; speaks to the capacity restraints it has faced that, if left unaddressed, "would translate into more dropped and blocked calls, slower speeds, and access to fewer and less advanced applications."
AT&T; directly addressed the iPhone as the source of many of its network troubles.
"AT&T;’s mobile broadband leadership, however, now presents it with unique spectrum and capacity challenges," AT&T; said in the filing. "A smartphone generates 24 times the mobile data traffic of a conventional wireless phone,3 and the explosively popular iPad and similar tablet devices can generate traffic comparable to or even greater than a smartphone. AT&T;’s mobile data volumes thus surged by a staggering 8000% from 2007 to 2010."
The company also speaks to the reasons that T-Mobile will be better off under the AT&T; umbrella: “As a standalone company, however, T-Mobile USA would continue to face substantial commercial and spectrum-related challenges. It confronts increased competition from industry mavericks such as MetroPCS, Leap, and others; its percentage of US subscribers has been falling for nearly two years; and it has no clear path to LTE.”
Sprint has been a harsh critic of the deal, which would create a company with nearly 130 million subscribers and leave Sprint a distant third among U.S. wireless, behind AT&T; and Verizon.
"It is an indisputable fact that this takeover would create an entrenched duopoly with control of approximately 80 percent of wireless industry revenues," says Vonya B. McCann, Sprint's senior vice president of government affairs in a statement to the press. “This kind of leverage could strangle competition and give AT&T; the power to increase prices, threaten innovation critical to this industry and eliminate American jobs.”
The merger faces a number of hurdles along the way to approval. Both the FCC -- which will review the filing before asking for public comment -- and the Department of Justice must approve the deal. It also will be taken up by Congress on May 11 during a hearing for the Antitrust, Competition Policy, and Consumer Rights Subcommittee of the Senate Judiciary Committee.
TechFlash Team
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