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Cellular South sues over T-Mo deal, plans mystery event

Tue, 09/20/2011 - 8:05am
Maisie Ramsay, Wireless Week

Cellular South has become the latest wireless operator to file suit against AT&T's proposed merger with T-Mobile USA, claiming the deal violates federal antitrust laws.

"This merger threatens the very existence of the regional carriers and will diminish the competition they provide," the company said in its complaint.

The complaint was filed yesterday in the U.S District Court for the District of Columbia, the same court where Sprint and the Justice Department filed their complaints against the merger.

As with Sprint's lawsuit, Cellular South's suit was filed as a related case to the DOJ's complaint. Seven state attorneys general joined the DOJ's suit on Friday, adding extra ammunition to the agency's fight against the merger.

Separately, Cellular South on Monday said it would make a "major announcement about its future" on Sept. 26. The event is apparently separate from its lawsuit over the T-Mobile deal.

Company spokesman David Miller declined to provide specifics about the announcement, saying only that it would affect "all aspects of our business."

"I think it's safe to say it's going to be a very historic announcement, not only for our company, but for the wireless industry," he said.

The rumor mill has so far been silent on what the news could be. Initial speculation from analysts points at the possibility of a merger between Cellular South and another regional operator, which would help the company gain much-needed scale, or some sort of partnership on mobile broadband services. However, analysts' conjecture could be off base, as little is known about the intentions of the privately held company.

Cellular South has been a vocal advocate for rural and regional wireless operators. President and CEO Hu Meena currently serves as chairman of the Rural Cellular Association (RCA), where he has lobbied for reforms affecting the survival of small wireless providers, such as interoperability in the 700 MHz band, Universal Service reform and an end to lengthy device exclusivity deals. The RCA is also opposed to AT&T's acquisition of T-Mobile.

The operator's lawsuit against the mega-merger will allow it to present evidence to the court about how the deal would impact small operators, which are already struggling to stay afloat in an increasingly consolidated market dominated by operators several times their size.

"The interests of current and future competition would not be protected by reviewing the merger only from the perspective of the national carriers (Verizon, AT&T, Sprint and T-Mobile) and without regard for the competition now provided by the regional competitors and that may be lost in the future," the company said.

Cellular South has 887,000 customers in Mississippi, Tennessee, Alabama, Florida and other surrounding states, many of whom are located in rural areas. The company first launched its service on the Mississippi Gulf Coast in 1988 and has since spent more than $700 million to expand its wireless network, with 1,400 cell sites, technology upgrades and permanent microwave rings. The CDMA-based provider offers nationwide coverage through a roaming deal and offers some GSM service through its 2010 acquisition of Alabama-based Corr Wireless.

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