Bloomberg News

AT&T Denies All Claims in Lawsuits by Sprint, Cellular South

November 17, 2011

(Updates with excerpt from filings in third paragraph.)

Nov. 16 (Bloomberg) -- AT&T Inc. denied all claims in antitrust lawsuits by Sprint Nextel Corp. and Cellular South Inc. over its proposed purchase of T-Mobile USA Inc.

AT&T, in separate filings today in federal court in Washington, rejected Sprint and Cellular South’s allegations that the $39 billion transaction would harm the companies’ ability to compete in the wireless mobile phone market.

“The expansion of capacity and other overwhelming efficiencies that will result from this transaction will benefit consumers, such that the transaction is in the public interest,” AT&T said in the filings.

The Justice Department sued Dallas-based AT&T and T-Mobile Aug. 31, saying a combination of the two companies would “substantially” reduce competition. Seven states and Puerto Rico joined the effort to block the deal, which would make AT&T the biggest U.S. wireless carrier.

Sprint, the third-biggest U.S. wireless carrier, filed its antitrust lawsuit in Sept. 6, saying the proposed merger would weaken its ability to compete with AT&T, the second-biggest, and Verizon Communications Inc., the market leader.

Cellular South, based in Ridgeland, Mississippi sued on Sept. 19, claiming the merger threatened to “substantially” cut competition.

Sprint’s Allegations

U.S. District Judge Ellen Segal Huvelle on Nov. 2 said that the suits by Sprint and Cellular South Inc. can proceed. Huvelle dismissed several claims, limiting the cases to Sprint’s allegations regarding access to mobile devices and Cellular South’s complaints involving roaming fees as well as devices.

Huvelle scheduled a hearing in the Sprint and Cellular South cases for Dec. 9.

The combination of AT&T and Bonn-based Deutsche Telekom AG’s T-Mobile unit would form the country’s largest wireless phone company, passing the current market leader Verizon Communications Inc. Overland Park, Kansas-based Sprint has lost money for 16 consecutive quarters.

The government’s case is U.S. v. AT&T Inc., 11-01560; Sprint’s case is Sprint Nextel Corp. v. AT&T Inc., 11-01600; and Cellular South’s case is Cellular South Inc. v. AT&T Inc., 11- 01690, U.S. District Court, District of Columbia (Washington).

--Editors: Peter Blumberg, Michael Hytha

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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