AT&T Begins Making Case for T-Mobile Deal

NEW YORK (TheStreet) -- AT&T(T) said Friday in a court filing that its proposed acquisition of T-Mobile USA, which is being opposed by the Justice Department, will mean better service for consumers.

According to multiple media reports, the company filed comments with the U.S. District Court of the District of Columbia late Friday, saying it believes the public will see a benefit from the combination and that overall service will improve.

"The combination of T-Mobile and AT&T is good for consumers," AT&T wrote, according to The Wall Street Journal. "Integrating the two networks will free up spectrum and create substantial new capacity to meet the spectacular growth in demand resulting from an increasingly on-line world."

AT&T agreed to acquire T-Mobile from Deutsche Telekom(DT) in a deal worth $39 billion in late March. The Justice Department moved on Aug. 31 to block the deal, saying the transaction would "substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives."

AT&T has reportedly offered to add 5,000 jobs in the United States and divest some assets in order to gain approval for the deal. A hearing on the case is slated for Sept. 21.

Shares of AT&T closed Friday at $27.54, down 1.5%. The stock has lost more than 7% since its Aug. 30 close at $29.62 just before news that the Justice Department was seeking to scuttle the deal. The decline has brought the forward annual dividend yield for the shares up to 6.1%.

--Written by Michael Baron in New York.

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