Leaked Doc Shows The Real Reason Behind AT&T T-Mobile Merger

Late last week an internal AT&T document href="http://www.broadbandreports.com/shownews/Leaked-ATT-Letter-Demolishes-Case-For-TMobile-Merger-115652">was accidentally leaked online which discussed their real reasons for wanting to merge with T-Mobile, and it confirmed all of our worst fears. To put it bluntly, the memo indicated that AT&T was doing it to reduce market competition, prevent it falling into the hands of another company, and after the merge went through, they’d probably jack up prices.

The letter also shows that AT&T’s claim that they need to acquire the network in order to bolster their LTE coverage is untrue, as building out their own one would actually cost significantly less than buying out T-Mobile.

Again, the reality appears to be that AT&T is giving Deutsche Telekom $39 billion primarily to reduce market competition. That price tag eliminates T-Mobile entirely — and makes Sprint (and by proxy new LTE partner LightSquared and current partner Clearwire) more susceptible to failure in the face of 80% AT&T/Verizon market domination. How much do you think wireless broadband market dominance is worth to AT&T over the next decade? After all, AT&T will be first to tell you there’s a wireless data “tsunami” coming, with AT&T and Verizon on the shore eagerly billing users up to $10 per gigabyte.

Regardless of the motivation behind rejecting 97% LTE deployment, the letter proves AT&T’s claim they need T-Mobile to improve LTE coverage from 80-97% simply isn’t true. That’s a huge problem for AT&T, since nearly every politician and non-profit that has voiced support for the merger did so based largely on this buildout promise. It’s also a problem when it comes to the DOJ review, since proof that AT&T could complete their LTE build for far less than the cost of this deal means the deal doesn’t meet the DOJ’s standard for merger-specific benefits.

It looks like this leak might be enough to scuttle the purchase, which we can only hope.

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