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U.S. DoJ files antitrust suit against AT&T's merger plans with T-MobileAdd to August 31, 2011 
Earlier today, the U.S. Department of Justice says it has filed an antitrust lawsuit against AT&T seeking to block its $39 billion merger with T-Mobile USA. The news doesn't come as any surprise since AT&T has been trying to have the merger approved ever since it went public with its merger plans in March. AT&T's merger with T-Mobile would create the largest single wireless carrier in the United States, combining AT&T's 98 million customers with T-Mobile's 34 million users, for a total of 132 million subscribers. AT&T is currently the second-largest wireless company by number of subscribers. T-Mobile is fourth, and Verizon Wireless is first. The Department of Justice (DoJ) said the merger would also lead to a situation in which just two companies --the AT&T / T-Mobile combination and Verizon Wireless-- would basically dominate the mobile segment in the U.S. The new AT&T and Verizon duo would account for more than 68.7 percent of all wireless subscribers and about 78.3 percent of the wireless industry's revenues-- something many have described as a 'duopoly'.  "We feel that the combination of AT&T and T-Mobile would result in tens of millions of subscribers across the nation facing much higher prices, fewer choices and lower quality products for wireless services," said James Cole, deputy attorney general. The FCC, which oversees the wireless industry, is in the midst of its own review of the proposed merger. Following the DoJ's announcement, FCC Chairman Julius Genachowski said that his agency also believes the merger raises "serious concerns about the impact on competition in the wireless industry." Wayne Watts, AT&T's general counsel, said in a statement that the company was "surprised and disappointed by today's action by the DoJ." He went on to say that the company remained "confident that this merger is in the best interest of all consumers and the United States, and that the facts will prevail in court." From the beginning, AT&T has claimed that the merger is necessary in order to significantly expand its faster 4G wireless network to compete with Verizon Wireless. Without the merger, AT&T says it would lack the necessary wireless spectrum and wherewithal to cover 97 percent of the U.S. population with 4G and LTE technology-- something that its own rivals have vehemently contested in the last few months. Then there's also the issue about wireless service in rural areas. But the Justice Department said it didn't buy AT&T's argument. Following what the regulator called "an exhaustive investigation," the DOJ said it concluded that AT&T did not need to acquire T-Mobile just to remain competitive, and that the company could deploy next-generation technology by simply investing in its own network-- something AT&T appears to be dragging its feet a bit, when compared to its rivals. "AT&T had not demonstrated that the proposed transaction promised any efficiencies that would be sufficient to outweigh the transaction's substantial adverse impact on competition and consumers," the DOJ said in a statement. Sprint and many of the smaller wireless carriers have also long argued that the merger will harm competition and raise prices for consumers, because it would eliminate T-Mobile, the last lower-cost mobile carrier with a national footprint. "By filing suit to block AT&T's proposed takeover of T-Mobile, the DoJ has put consumers' interests first," said Vonya McCann, Sprint's senior vice president of government affairs. The Department of Justice said it concurred with the smaller wireless carriers' opinions, noting that the agency filed the lawsuit to protect price competition, among other things. The regulator labeled T-Mobile as an important source of competition in the wireless market.  "Just about any way you look at this proposed merger, it is anticompetitive," said Sharis Pozen, acting head of the DoJ's antitrust division. "It raised serious concerns, and we believe it violates the law." The lawsuit doesn't necessarily mean that the deal won't get done, however. In April, the DoJ filed an antitrust lawsuit against Google, following its $700 million takeover bid for ITA, the world's largest airline search software company. The DoJ and Google then quickly settled the claim, with the Justice Department approving the deal, provided that Google accept certain concessions and restrictions. In other mobile news Apple's iOS isn't gaining ground as fast as Android is, a new study from research firm ComScore has found. During the three-month period that ended on July 31st, Android captured 41.9 percent of the U.S. smartphone market, representing a 5.4 percent increase over the 36.4 percent market share it had in the quarter that ended in April. These numbers surprised even the most optimistic sales forecast issued in Dec. 2010. Apple's iOS platform came in second during the three-month period, earning a 26.9 percent market share, up from the 25.8 percent it had in the prior period. RIM's BlackBerry operating system came in third with a 21.6 percent share, down from the 25.8 percent share it had during the previous three-month period. Windows Phone 7 and the Symbian OS rounded out the top 5 with 5.6 percent and 1.7 percent market share, respectively. ComScore's newest numbers are just the latest research to conclude that Android is easily dominating all other rivals in the mobile segment. On Aug. 12, research firm NPD said that during the second quarter, Android was running on 52 percent of all smartphones sold in the U.S., besting iOS, which secured a 29 percent market share. NPD concluded that BlackBerry's operating system had a 10.9 percent market share. And it was a similar story on a global basis. Research firm Gartner earlier this month revealed that Android had 43.4 percent global market share during the second quarter. Symbian controlled 22.1 percent of the global segment last quarter, while iOS trailed with 18.2 percent worldwide market share, according to Gartner.  Android's success is helping the U.S. smartphone market literally explode. During the three-month period ended July, 82.2 million people in the U.S. owned a smartphone, ComScore found. That figure was up ten percent from the prior three-month period. But even though a growing number of people have advanced devices that let them surf the internet, check email, and download apps, sending a text message was their most popular activity during the last quarter. According to ComScore, 70 percent of mobile handset owners sent out an SMS during the three-month period. Using a web browser and downloading apps came in second and third with 41.1 percent and 40.6 percent of Americans engaging in those activities, respectively. On which devices were those folks actually sending out texts and surfing the Web? According to ComScore, Samsung's handsets proved to be most popular during the last three-month period, earning a 25.5 percent market share. LG's devices had a 20.9 percent share. Motorola, Apple, and RIM rounded out the top five with 14.1 percent, 9.5 percent, and 7.6 percent share, respectively. During the three-month period ended in April, all the companies were in the same rank order, though RIM had slightly more market share at 8.2 percent. In other mobile news LightSquared continues its plans in being an eventual wholesale provider of mobile data services announcing an agreement with Simplexity MVNO services to operate as a MVNE (mobile virtual network enabler) for potential MVNO partners. The deal calls for Simplexity to become a wholesale customer on LightSquared's planned LTE network, providing while label services for Simplexity's MVNO partners. That's all nice and dandy, but LightSquared is still beleaguered with its ongoing GPS interference issues with navigation systems used on commercial aircraft. How quickly the company solves those issues will be key in moving further with other plans, say some wireless industry observers that have been following the story closely. Simplexity claims partners in retail, electronic retail, original equipment manufacturers, marketing organizations and affinity groups. Simplexity also owns online mobile device retailer Wirefly.com. “Our operational scale and experience will give our partner companies the ability to provide customized wireless offerings to their customers at a fraction of the time and cost normally required to launch a full scale MVNO,” said Terry Hsu, president of Simplexity MVNO Services. 
LightSquared recently signed a 15-year spectrum hosting deal with Sprint that could see the wireless carrier deploy services across 260 million potential customers by the end of 2015. Those plans are dependent on gaining approval from the Federal Communications Commission to use its 1.6 GHz spectrum assets that are causing severe interference with commercial GPS services. In other mobile news Sprint says it sent out media invitations late yesterday to a strategy update with its senior management in New York City slated for October 7. No additional details were given. However, Sprint is expected to provide long-awaited details on its fourth generation mobile broadband plans. Sprint CEO Dan Hesse first disclosed plans for the October briefing during the company's second-quarter earnings call. Hesse added the company planned to describe its network upgrade plans in more detail, but hadn't finalized its strategy just yet. The invitations to the briefing make the event official. "The additional time between now and then will allow us to complete more pieces to our plan," he said during the earnings call. Though it seems likely that Sprint will follow its original mobile broadband plans that it talked about during the briefing, rumors are still circulating that the wireless operator may instead use the event to debut the Apple iPhone. The Wall Street Journal reported in July that Sprint would land a new version of the iPhone and the current iPhone 4 in mid-October, but the reports have yet to be confirmed by Apple or Sprint. Sprint's 4G network strategy is anything but clear, however. The company has a majority stake in Clearwire and resells its WiMAX service under its own brand, but has a troubled relationship with Clearwire, a financially strapped mobile broadband provider that has been in the news quite a bit lately. Sprint added another 4G flavor to the mix late last month when it signed a $9 billion deal to build and operate LightSquared's LTE network. The contract allows Sprint to resell LightSquared's LTE service, but the arrangement is void if the FCC blocks LightSquared from moving ahead with its plans over severe issues with GPS interference coming from LightSquared system. Nevertheless, Sprint could still push ahead with Clearwire, which plans to deploy LTE service if it can get an extra $600 million in funding, or it could cross its fingers that LightSquared's plans will be approved by the FCC, something that many wireless industry analysts say could not happen, given the many hurdles LightSquared needs to surmount due to its system that causes severe interference with GPS navigational systems used aboard commercial aircraft. Or it could go with some combination of both. And of course, Sprint could also deepen its relationship with Clearwire. Its network modernization plan calls for equipment that supports both its own spectrum and the 2.5 GHz band used for Clearwire's WiMAX service. Vendors have already begun installing the new hardware. Source: The U.S. Department of Justice. Add to 
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