AT&T and T-Mobile USA grilled over proposed merger

US lawmakers have given AT&T and T-Mobile executives a hard time at a competition hearing, as they debate whether to allow the $39bn merger of the two telcos to go ahead.

“I see absolutely no redeeming reason for this merger to go through,” Representative John Conyers Jr. of Michigan, the senior Democrat on the US House of Representatives Judiciary Committee said, according to a PC World report.

Conyers also said that he feared that the merger would result in job loses at both companies, and would also lead to higher prices for consumers.

Speaking to Randall Stephenson, chairman and CEO of AT&T, and Rene Obermann, CEO of Deutsche Telekom, T-Mobile’s parent company, Conyers said: “Normally, at antitrust hearings, we get the promises that there won’t be losses of jobs and they won’t raise the rates. The thing I like about these witnesses is, they don’t even promise that. I thank you for your evasiveness on this issue.”

In defence of AT&T, CEO Stephenson said that the merger would help with its spectrum crunch, and enable the company to roll out LTE services to feed the demand for high data from its customers.

Meanwhile, Obermann stated that the proposed merger was good for T-Mobile USA customers as the company did not have the spectrum needed to roll out LTE and therefore to compete.

Representative Bob Goodlatte, a Virginia Republican and subcommittee chairman, picked up on this and asked Obermann why he had told investors in January that T-Mobile had a superior 4G network with better spectrum resources than competitors.

“Is T-Mobile today a viable competitor in the U.S. market, or is it not?” Goodlatte said.

Obermann was forced to admit that T-Mobile did not in the long term have the spectrum and that it was therefore trying to compete via “aggressive marketing”, – which would explain its propensity for describing its HSPA+ network and supporting devices as 4G.

In related news Canadian authorities said they would be also investigating the proposed merger.

The fourth annual LTE North America Conference takes place in Texas, US, November 8-9

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