• Germany's news in English

US government blocks T-Mobile sale

The Local · 1 Sep 2011, 11:49

Published: 01 Sep 2011 11:49 GMT+02:00

Facebook Twitter Google+ reddit

The US government justified the move Wednesday on the grounds that the $39-billion deal would "substantially" reduce competition in the mobile phone network market. Deutsche Telekom's shares fell by 7.6 percent when the news broke.

Telekom faces serious problems if the deal falls through. Company boss René Obermann would be forced to look for a new buyer in the US, and is unlikely to get such a high price again.

Deutsche Telekom announced its intention to sell T-Mobile in March. The subsidiary had suffered from falling turnover, and had been relegated to fourth biggest mobile network in the US.

But politicians and consumer protection agencies have heavily criticized the proposed deal, and US authorities have spent months deliberating its legitimacy.

The sale would mean AT&T had a total of 120 million customers and a 39 percent market share in the US. Regulators fear that would create a duopoly - together with market leader Verizon - covering 76 percent of the market.

Deutsche Telekom is left with three options should the deal collapse: find a new buyer, merge with the third biggest US mobile phone company Sprint, or try to complete a new deal with internet provider Clearwire or a cable network company.

The Justice Department's decision represents the biggest blow in Obermann's glittering career.

T-Mobile's poor performance has been dragging down Deutsche Telekom's share value for months. On top of that, the company had been counting on the money to extend its fibre-optic network in Germany and to pay off some of its debts.

Story continues below…

AT&T announced Wednesday that it was appealing against the decision and would do all it could to save the deal.

The Local/bk

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

12:04 September 1, 2011 by marimay
That's good. I hate AT&T. Always trying to sneak extra charges on everything, so make sure you pay attention to what they're charging you for.
13:38 September 1, 2011 by HeyStella
I did not know that a duopoly addressing only 3/4th of the Market was against the law in the US.
22:33 September 1, 2011 by wxman
What else would you expect from the Obama socialists?
09:45 September 2, 2011 by marimay
You're on a german news website complaining about socialism? That's funny...
11:16 September 2, 2011 by fourwheeler77
Well at least it would be a duopoly, unlike the monopoly that Microsoft has. T-Mobile has always sucked in America and I do not know of a time that they were above being #4. So it is already competition between two networks, because Sprint and T-mobile stink. The big thing that kept AT&T competitive was the fact that they used to be the only network with the Iphone. Now that Verizon does the Iphone, it is no wonder they have 76% of the customers in America. I had Verizon before I left America and I will get them again when I go back.

So who cares if there are only three major networks in America. If that happens, maybe it will force Sprint to get off their butts and improve their network. Get rid of the stupid chirps and push to talk service, because it is annoying. If people wanted to hear your phone conversations, we would all have two way radios instead of cell phones!

And for those of you in Germany......do you like D-Telekom?? I think Vodafone is the better choice in Germany.
11:50 September 2, 2011 by rfgenerator
Over here in the US. AT&T is referred to as "A Fee & Fee" they are one of the most anti-consumer companies in the country.
Today's headlines
Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

Eurowings cabin crew union to strike all day Thursday
Photo: DPA.

UPDATE: A union representing cabin crews on Lufthansa's budget airline Eurowings has announced that strikes will last all day Thursday as ongoing contract negotiations continue to falter.

Hesse hopes to set example by building Iraqi orphanages
Refugee children in northern Iraq. Photo: DPA

The wealthy central German state of Hesse has set aside €1 million to build a school, family homes and an orphanage in northern Iraq, in an effort to help refugees there.

The Local List
10 German clichés that foreigners get very wrong
David Hasselhoff. Photo: DPA

Whether it be efficiency, humourlessness or a love of a certain Baywatch star, there are many cliches stuck in the heads of foreigners about Germany. But how true are they?

Fake Germanwings victim relative convicted in Cologne
A torn piece of metal at the crash site in 2015. Photo: DPA

A German court on Wednesday gave a woman a year's suspended jail sentence for posing as the cousin of a victim in last year's Germanwings plane crash and obtaining compensation offered by the airline.

Couple accused of torturing, murdering women go on trial
The so-called 'house of horrors' in Höxter where the couple allegedly tortured and killed women. Photo: DPA.

A couple accused of luring women to their village home with personal ads started trial on Wednesday over charges that they tortured and killed at least two of their victims.

After July attacks, govt drafts new video surveillance law
Photo: DPA

The Interior Ministry is drafting a law which will enable public spaces to be filmed for surveillance purposes as a reaction to deadly attacks in July, according to a newspaper report.

Merkel: murky internet giants distort perception of reality
Angela Merkel. Photo: DPA.

Chancellor Angela Merkel called on Tuesday for internet giants to make public their closely-guarded algorithms, claiming that they are not giving people diverse enough information.

Pegida leader 'paid court costs with group's money'
Pegida leader Lutz Bachmann. Photo: DPA.

The leader of the anti-Islam movement reportedly used money from Pegida's coffers to pay for two personal court cases, German media reported this week.

Anger as Berlin scraps Turkey concert on Armenia genocide
The Dresden Symphony Orchestra. Photo: DPA

Germany's foreign ministry Tuesday scrapped a planned symphony performance on the Armenian "genocide" in its Istanbul consulate, sparking accusations that it was caving in to Turkish pressure.

10 ways German completely messes up your English
Sponsored Article
Last chance to vote absentee in the US elections
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
jobs available
Toytown Germany
Germany's English-speaking crowd