German Chancellor Not Asking for Obama's Help on Proposed Sale of T-Mobile USA to AT&T: News Report

By Ed Silverstein September 13, 2011

The story that German Chancellor Angela Merkel spoke to U.S. President Barack Obama to find support for Deutsche Telekom’s proposed sale of T-Mobile USA to AT&T is just a rumor. And it’s also being denied by a top spokesman for the German government.

Handelsblatt, a German language business newspaper, reported that Deutsche Telekom was trying to get Merkel to back the deal.

But Merkel never spoke to Obama about the issue, an unnamed German spokesman told Reuters, Bloomberg News reported.

Deutsche Telekom is trying to sell T-Mobile USA to AT&T for $39 billion.

The German government holds a 32 percent stake in Deutsche Telekom, according to The Times of India.

The U.S. Justice Department has filed a suit to block the deal. AT&T’s lawyers recently filed a response to the U.S. Justice Department's lawsuit, TechZone360 reports. AT&T argues that the Justice Department is wrong that the merger – which would create the largest wireless company in the United States – would lead to a monopoly that would hurt consumers by increasing prices.

“The complaint largely ignores the significant competition from established providers such as Verizon Wireless and Sprint, innovative upstarts such as MetroPCS and Leap/Cricket, and strong regional providers like US Cellular and Cellular South, among others,” according to the AT&T legal document.

“The Department does not and cannot explain how, in the face of all of these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation,” according to the AT&T response quoted by TechZone360. “Nor can it explain how T-Mobile, the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T.”

On the other hand, TechZone360 also cited comments from top federal lawyers warning about the dangers of the acquisition.

“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,” U.S. Deputy Attorney General James M. Cole said. “Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.” 

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Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

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