Justice Department filed a lawsuit in federal court on August 31st in an attempt to prevent the merging of AT&T and T-Mobile, in which AT&T offered $39 billion for T-Mobile's partnership. The lawsuit focused on T-Mobile's "disruptive" force in the industry, bringing attention to the company's many "firsts," which included the first Google Android smartphone. The lawsuit brought further attention to T-Mobile's aggressive pricing strategy, the sign of a healthy company (Reardon).
However, AT&T argued that its acquisition of T-Mobile would create many jobs in the US at a time when the country desperately needs it. Furthermore, they argued that the merger will allow the company to meet consumer demands quicker than they would be capable of if the merger did not take place (Los Angeles Times). .
Although the Justice Department believes that T-Mobile should remain its own separate entity, industry analysts are skeptical of the company's ability to survive on its own. The top two industry players, Verizon Wireless and AT&T, post increasing numbers of users every quarter, whereas the two bottom industry players, Sprint and T-Mobile, are losing more customers each quarter (Reardon). .
The wireless device industry is quickly moving towards a data-centered environment, prompting the four industry leaders to gather as much spectrum as they can to accommodate a growing number of users. The FCC is also currently working on making more spectrum available, but the process could take years. AT&T bid on T-Mobile in order to jump out ahead of the competitors and increase their capacity as their cell phone towers become even more crowded without having to wait for the FCC to announce open capacity for sale (Reardon).
Because of its decreasing number of subscribers, T-Mobile has plenty of extra capacity. In fact, the last time T-Mobile bought capacity was to build a 3G wireless network, and they have no spectrum in place to build a 4G network.
