The U.S. Department of Justice will require telecom giant AT&T to sell off pieces of its mobile network in parts of Louisiana and Mississippi in order to continue with its US$944 million acquisition of Centennial Communications, the agency said Tuesday.
If AT&T did not divest its assets in the two states, the acquisition would "substantially lessen" competition for mobile telecom services and would likely result in higher prices, lower quality and reduced network investments, the DOJ said. The area covered includes parts of southwestern and central Louisiana and southwestern Mississippi.
The DOJ's Antitrust Division, along with the attorney general of Louisiana, filed a civil lawsuit Tuesday in U.S. District Court for the District of Columbia to block the proposed acquisition of Centennial by AT&T. At the same time, the DOJ and the Louisiana attorney general filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit.
According to the complaint, AT&T and Centennial are each other's closest competitors for a significant number of customers in eight cellular marketing areas (CMAs), as defined by the U.S. Federal Communications Commission. The complaint alleges that the proposed transaction would substantially reduce competition for mobile wireless telecommunications services in each of the areas.
AT&T is the second-largest mobile telecom provider in the U.S. by number of subscribers, serving nearly 80 million subscribers throughout all 50 states, the DOJ said. In 2008, AT&T earned mobile revenues of about $44 billion.
Centennial is the eighth-largest mobile telecom provider in the U.S., with about 1.1 million subscribers in six states, Puerto Rico and the U.S. Virgin Islands.