ATT filing hints T-Mobile merger claims inflated

AT&T on Thursday accidentally posted a filing (since pulled, available below) that called into doubt one of the core arguments for its buyout of T-Mobile. While it has publicly said it could only get to 97 percent coverage of the US population with LTE by spending $39 billion to buy T-Mobile, an estimate included in the document instead showed that it would only need $3.8 billion in network expenses to go beyond the 80 percent it wanted otherwise. Senior management claimed that the deal would let it "better absorb the increased capital investment," according to AT&T counsel Richard Rosen, but couldn't explain why spending ten times more on a T-Mobile deal made this sound.

The same document also notes unusual timing. AT&T had decided against building to 97 percent on the cost argument at the start of January but was already making a proposal to buy T-Mobile on January 15, two months before it reached a deal in public. Its process implied, though didn't confirm, that AT&T had withheld the expansion to make it an incentive to put in front of the FCC.

Marketers at AT&T knew that they would be at a competitive disadvantage to Verizon if the LTE coverage didn't grow.

AT&T would likely still get incidental benefits from the deal, such as wider coverage in existing areas, but this too has been disputed by a Sprint proposal that suggests many of the immediate coverage complaints could be solved through tapping unused spectrum and moving customers over sooner to technology less likely to face congestion.

The statements, if not disproved through substantial countering evidence, could throw a Department of Justice review of the case in jeopardy. To approve a merger where reduced competition is a concern, the DOJ has to find that the benefits of the merger would offset the drawbacks. Eliminating a major competitor without the resulting regional expansion benefits would leave relatively minor advantages while giving AT&T control it might not easily give back. [via Wireless Week and BBR]

By Electronista Staff

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industry, sprint, AT&T, T-Mobile, FCC, mobile phones, Department of Justice