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The U.S. telecoms giant AT&T has agreed to buy T-Mobile USA for 39 million U.S. dollars from Deutsche Telekom, the largest European telecoms company, according to foreign media report Monday.
The merger was announced Sunday by AT&T, the second largest mobile groups in the U.S. Both the board of AT&T and that of Deutsche Telekom had approved the deal, which includes 25 billion in cash and the rest in AT&T stock.
The deal, once passed the intense regulatory scrutiny, would form the biggest mobile operator in the U.S. and shrink the number of major national wireless operators from four to three.
The new union, with nearly 130 million customers, would probably overtake the current market leader Verizon Wireless and far surpass the third largest carrier Sprint Nextel in size.
AT&T chairman and chief executive Randall Stephenson thought highly of the transaction and believed it would deliver "significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations."
Deutsche Telekom chairman and chief executive René Obermann was confident that their "common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices. "
However, there were concerns from some federal lawmakers that the merger would dampen competition and lead to fewer options and higher prices for mobile services.
Complaints about the merger also came from consumer advocacy groups, who pointed to consistently higher mobile phone bills each successive year.
"The wireless market, now dominated by four big companies, would have only three at top…We know the results of arrangements like this -- higher prices, fewer choices, less innovation." said Gigi Sohn, president of public interest group Public Knowledge.
However, it may not be denied that the merger would provide more wireless connections to rural areas, an Obama administration priority, according Larry Cohen, president of the Communications Workers of America labor union.
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