US government blocks T-Mobile sale

Deutsche Telekom has suffered a major blow at the hands of the US Justice Department, which could block the sale of the German telecom giant's US subsidiary T-Mobile to the corporation AT&T.

US government blocks T-Mobile sale
Photo: DPA

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.

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

The Local/bk

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German woman sues airport security for missing flight to Mallorca

An airline passenger is suing police after missing her flight to Mallorca in Spain due to having to wait in a lengthy cue at airport security, German media reports.

German woman sues airport security for missing flight to Mallorca
Airport security controls. Photo: DPA

The 32-year-old businesswoman from Bochum, near Dortmund in western Germany, was travelling to Palma de Mallorca from Cologne-Bonn airport on May 19th last year, the Bonn newspaper General Anzeiger reports.

The woman reportedly arrived at the airport to check-in two hours before her flight departure time. After having to wait more than an hour at the security control area, despite raising concerns with staff that she was running out of time, the woman raced to the gate to catch her flight but she was too late – boarding was already completed.

At the Bonn district court, the woman is suing the Federal Republic of Germany – as the employer of the Bundespolizei, the Federal Police – for more than €738 in damages.

After missing her flight she was forced to take a plane from Düsseldorf to her destination the next morning, which had cost €540, according to the General Anzeiger.

The passenger is accusing the Federal Police, which is responsible for airport security controls, of a 'breach of duty': she says not enough control facilities were open when she was due to fly, and too few staff were working.

She believes a lack of organization led to her missing the flight.

However, the defendant disagrees. Police argue that there were enough controls open on that day, and that the number of staff depends on the amount of passengers passing through the airport. The police received this information from the airport operator.

The court must now clarify whether the queue was actually caused by a lack of staff or by other causes which the police are not responsible for.

A settlement offer of more than €150 was rejected by the plaintiff, the newspaper reports.

The case will be reviewed and a decision will be made by judges in Bonn.