AT&T faces another obstacle in its fight to acquire T-Mobile, as Cellular South sues to block the deal, joining a host of other rivals.
Cellular South, the ninth-largest carrier in the U.S., said the merger “threatens to substantially lessen competition” and will lead to a lopsided market. In addition, the regional operator said AT&T’s deal would keep it from offering the best devices, force it to raise prices and hurt roaming deals.
The new lawsuit joins similar suits from the Department of Justice and Sprint, which also contend the $39 billion merger is anti-competitive.
“As this growing chorus of opposition shows, this proposed transaction violates antitrust law and is not in the best interest of consumers and the American economy,” said Sprint’s senior vice president of government affairs, Vonya McCann.
The lawsuits from Sprint and Cellular South are two more obstacles AT&T will have to clear before the merger can be approved, but the carrier feels its competitors have ulterior motives. AT&T said Sprint, and now Cellular South, are more interested in protecting themselves than promoting competition that benefits consumers.
The Dallas, Texas-based carrier has been approaching smaller carriers like MetroPCS, Leap Wireless, and even Sprint to measure carrier’s interest in buying some of its acquired spectrum and subscriber base, but it has not been enough to end heavy scrutiny of the merger. AT&T will now have to reevaluate its strategy moving forward as it attempts to slow the avalanche of negative publicity falling on its proposed deal.
The carrier also indicated its willingness to discuss a settlement with the Department of Justice to push the merger through. However, analysts believe the DoJ may demand too much from AT&T for the carrier to agree to a settlement, which may lead to a costly litigation trial.
AT&T is making moves to save its ailing merger, but opposition continues to mount against the $39 billion acquisition. The carrier may have to invent a new strategy to reverse the negative momentum against it to keep the possibility of a merger alive.
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