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DOJ gives T-Mobile - MetroPCS merger the nod

Germans hit back at AT&T's network claims

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The proposed merger of Deutsche Telekom's US subsidiary T-Mobile and regional carrier MetroPCS looks likely to go ahead, after the US Department of Justice (DOJ) allowed its waiting period for objections to pass without making a comment.

The deal isn't done yet, however. The Federal Communications Commission (FCC) can still stick its oar in and call a halt to the process, and last week 64 members of the Democratic Party in Congress signed a letter to FCC boss Julius Genachowski asking him to consider the effect of such a merger on jobs.

"We are concerned that T-Mobile and MetroPCS have announced as part of the proposed merger $6-7 billion in post-merger 'efficiencies' and 'transaction-specific savings'," the letter reads.

"Experience has shown that companies often achieve these savings through job cuts and employee lay-offs. We cannot support another consolidation of two companies that leads to a reduction in American jobs."

The letter notes that MetroPCS outsources its customer support to cheap locations in the Philippines and Central America and T-Mobile has recently shut down seven US call centers, pushing over 3,300 staff into the ranks of job-seekers. Any deal should include a clause to protect staff in the US, the Democrats request.

The deal also has to be approved by MetroPCS shareholders. The board is unanimously recommending the deal and a meeting will be held on April 12 to vote on the matter. If it goes ahead, the two companies will operate under the T-Mobile banner.

"If stockholders vote against the proposed combination, there is no assurance that MetroPCS will be able to deliver the same or better stockholder value," warned the board in a statement.

Meanwhile a very public war of words has broken out between AT&T and T-Mobile over the state of each other's mobile networks. At CES this year, T-Mobile CEO John Legere described AT&T's network coverage in New York as "crap," and this has ruffled some feathers.

In response, AT&T took out full-page adverts in the US press criticizing its rival's mobile phone network. AT&T claimed that T-Mobile's network was 50 per cent slower than its own, with twice as many dropped and failed calls.

AT&T customers might see this as the pot calling the kettle a utensil of color. AT&T's exclusive deal with Apple for the iPhone saw its network become infamous for dropping calls as it staggered under the strain of fashionistas using their new toys. It has only been after a massive investment campaign that the network is now back in somewhat-reasonable shape.

But the Germans are proving that they aren't all smiles and sunshine. In response to AT&T's claims, T-Mobile has taken out a series of advertisements of its own mocking the US mobile behemoth, making the simple but effective point that "If AT&T thought our network wasn't great, why did they try to buy it?" ®

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