Why Does the US Sue to Block the AT&T’s takeover of T-Mobile?
AT&T is the second largest cellular plan provider (Verizon is number 1). T-Mobile is the fourth largest provider of cellular plan in the US, and is owned by Deutsche Telekom AG. The third largest US cellular plan provider is Sprint…
Based on the snippet below from the online site of The Wallstreet Journal, it sounds like T-Mobile needs some help and wasn’t a victim.
Deutsche Telekom, unwilling to keep investing in the U.S. wireless industry, had been seeking ways to offload T-Mobile USA for at least two years before it settled on the sale to AT&T.
So the takeover of T-Mobile by AT&T would have made AT&T the largest cellphone plan provider, and give AT&T a needed shot of newer technology to help them improve their service. So I see the synergies of such a takeover, but I also understand how it could reduce competition and drive prices up. In my opinion, the prices of cellphone plans are already too crazy high to begin with! It’s amazing to me that 10 years ago cell phone plans were cheaper or at least as expensive as they are today. Usually, when a service or product is first introduced, it get cheaper as the masses jump on board, but this hasn’t been the case with cellphone plan providers.
So based on the previous paragraph, you think I’d be positive on the block by US Department of Justice, but I’m not. My problem is why wasn’t this entire AT&T proposal nixed at the beginning when AT&T submitted their plans for the merger of the two companies? It seems wasteful of the Department of Justice to change their mind and later go after AT&T in court. It makes one wonder if the US is doing this move so to help someone’s career? After all, they could have denied the merger at the very beginning before money and plans for the merger proceeded forward!
Lately, I’ve noticed the US government seems to be suing more than they have ever before. I have to wonder if other countries sue themselves as much as we do? I think it makes us look silly when a company gets approval for a merger by the government and then later gets sued by the government. It’s like telling a kid she can have a snack, then yelling at the kid what she unwraps it so she can eat it.
Doesn’t really instill a lot of confidence in the government huh? And people wonder why US companies are sitting on the sideline because they are afraid what will come out of the government next. Such actions don’t help businesses recover, and while I’m not in favor of AT&T takeover, I think it sends a bad message when a company gets attacked after getting approval from government to go ahead with their plans. Why even have businesses submit merger or takeover plans for review by the government, if shortly there after, the government can just go and sue the company anyway? Kind of defeats the purpose and expense of having a US review department of the government?
I know everybody is focused on AT&T, but I have to wonder if I’m the only one that thinks that the government suing AT&T makes the US government look a bit less smart than it should be? Doesn’t flip-flop actions by the government in this case make us all lose confidence in the economic recovery, since business will be frozen until the next elections? What if the same government stays in power, does that mean that businesses will continue to stay frozen and the possibility of a true economic recovery remains slim?
Confused by the actions of the government,