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US blocks AT&T and T-Mobile deal US blocks AT&T and T-Mobile deal
(40 minutes later)
US telecoms giant AT&T's bid to buy rival T-Mobile USA could be facing collapse after the US government sued to block the $39bn (£24bn) deal.US telecoms giant AT&T's bid to buy rival T-Mobile USA could be facing collapse after the US government sued to block the $39bn (£24bn) deal.
AT&T agreed to buy the firm from Deutsche Telekom in March, aiming to create the largest US wireless network.AT&T agreed to buy the firm from Deutsche Telekom in March, aiming to create the largest US wireless network.
But the Justice Department says the merger would violate US anti-trust law and has requested a court order to stop it going ahead.But the Justice Department says the merger would violate US anti-trust law and has requested a court order to stop it going ahead.
The deal would have given AT&T about 43% of the US mobile phone market.The deal would have given AT&T about 43% of the US mobile phone market.
However, it cannot go ahead without approval from both the Justice Department and the Federal Communications Commission (FCC).However, it cannot go ahead without approval from both the Justice Department and the Federal Communications Commission (FCC).
"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Deputy Attorney General James Cole."The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Deputy Attorney General James Cole.
"Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.""Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."
The Department of Justice argues that the merger would combine two of the four firms who provide 90% of the mobile phone services in the US.The Department of Justice argues that the merger would combine two of the four firms who provide 90% of the mobile phone services in the US.
It said T-Mobile had been a "disruptive force" in the industry, aggressively driving down prices.It said T-Mobile had been a "disruptive force" in the industry, aggressively driving down prices.
Rivals including Sprint have also argued that the merger would hurt competition.Rivals including Sprint have also argued that the merger would hurt competition.
Earlier, AT&T had said it would repatriate 5,000 call-centre jobs from overseas if regulators approved the deal.Earlier, AT&T had said it would repatriate 5,000 call-centre jobs from overseas if regulators approved the deal.
It claims that its takeover of T-Mobile in the US would create up to 96,000 jobs as a result of its additional $8bn investment in infrastructure.
Some of this money will go into improving its wireless broadband service, taking its faster LTE or 4G network to 97% of Americans, it says.
AT&T says existing T-Mobile customers will be able to keep their current price plans.