tv World Business Today CNN March 21, 2011 4:00am-5:00am EDT
would have been a lot easier to do what has been done. that being said, the opening campaign here is textbook with airplanes coming from different countries, precision weapons hitting targets. >> this will have to be the last word. i hate to caught you off. i'm don lemon at don lemon, a hour of the cnn newsroom begins now. for international viewers "cnn world report." good morning from cnn london. i'm charles hodson. >> i'm pauline chu. welcome to "world business today." here are the top stories on this monday, march 21st. >> oil market anxiety. crude prices are on the rise again as the conflict in libya escalates. >> the world bank says the disaster in japan could cost the
economy $235 billion. and the making of a major tie-up in the telecoms industry, can at&t and t-mobile convince regulators to give their proposed merger a go ahead. an international coalition has brought themselves to moammar gadhafi doorstep. coalition spokespeople say ed c ka cak moammar gadhafi was not the target. qatar is making a direct contribution to the air strike with four of its fighter planes. the no-fly zone is intended to
protect libyan civilians. coalition forces have pro-gadhafi supporters outside bengahzi, now an erie quiet has settled over the city. >> the impact of the no-fly zone is being felt in the city of bengahzi from 20 miles, 30 kilometers on the outskirts, air strikes brought moammar gadhafi military machine to a halt. the debris spanning miles. at least 70 vehicles that we counted were destroyed ranging from armored pe eed personnel c to tanks with their turrets off. many people are expressing their gratitude to the international community for finally intervening. they believe had there not been any form of international help they would have been massacred
by gadhafi forces. on saturday, they gadhafi forces were in the city, and they were driven back, but not before 95 people were killed. one eyewitness speaking of how gadhafi's forces, manning machine guns and small arms weapons were firing indiscriminately into buildings. many people expressing their thanks to the various global leaders who did, in fact, support their cause. but many also expressing concern not knowing exactly how the days ahead are going to unfold. we have seen, since that assault on bengahzi on saturday, a sort of eerie calm descend upon the city with many shops remaining closed. we have seen an increase in opposition-manned checkpoints. the searches are also much more diligent despite the fact that
gadhafi called for a cease-fire, nobody here believes his true intentions. many feel given the fact they have international support, they can take the battle all the way to tripoli. u.n.-sank shunned military strike strikes on forces in libya has sent the oil prices surging again. nymex crude is going for just under $103 a barrel. brent crude is up more than $1.10, trading at more than $115 a barrel. libya's crude production has been cut drastically due to the turmoil there. output stands at less than 400,000 barrels a day, that's less than quarter of normal production before the crisis and
he's ur all oil workers are urged to return to their jobs. >> we were able to restore most of the oil fields, they're ready to produce, but we need our work force to come back and this is why we are calling on all companies that working with libya and have this contractual relationship and different agreement with them to send back their experts and start resuming our production. so as it will be gradually increasing. it is not expected that it will be increasing and come back to normalcy in a week or two, but it will take some time. >> so, he's talking about all the western oil companies that have production facility there's in libya. libya supplies around 2% of the world's crude, which is a relatively small amount compared to saudi arabia and other opec members. still those nations have tried to ease market concerns by
agreeing to make up for libya's oil losses. but the spreading unrest across the arab world seems to be what's rattling investors, especially as oil-rich nations like yemen and oman continue to be wracked by protests and violence, charles. let's move on to a major deal in the u.s. telecoms market. at&t agreed to buy t-mobile usa from deutsche telekom for $39 billion in cash and stock, beating rival sprint. but the merger between the united states's second and fourth biggest mobile phone operators still needs regulatory approval. analysts say it might be difficult since it limits the number of carrier choices for u.s. consumers if it passes at&t and t-mobile together will become the biggest mobile phone operator in the united states, easily topping verizon with around 130 million subscribers. first let's have a look at the
stock market action, starting here in europe. we are seven minutes into the trading session. these volatile times continue, but this time with some gains. about 1% for the london ftse, and about nearly 2% for the dax and the paris cac up by 1.5%. i suspect higher oil prices will limit those gains as we go forward. >> charles, here in asia, the mr. k markets were mostly higher. on congress and seoul each gained more than 1% by the close. energy stocks were up across the region on those rising oil prices that we told you about. mining and uranium stocks also helped to give sydney's benchmark a boost. in china, in shanghai, investors seemed to shrug off the central bank's decision to raise requirements for banks by a half
percentage point that came late friday and had been widely expected. that decision to ask banks to set aside more cash reserves. markets in japan were closed for the vernal equinox holiday. the japanese yen has fallen slightly against the dollar. right now it's trading at 81.16 against the dollar. japan and other g-7 nations have intervened to cool the currently's rapid rise after it hit that all-time high last thursday morning. now, economists say it may not be long before there is more intervention. >> let's look ahead to wall street now. markets there do look set for a higher open when trading begins later on the day. let's look at u.s. futures and we're looking at gains of around about three quarters of a percent for the dow 30. more than that for the s&p 500 and for the broader market and the tech stocks of the nasdaq.
and breaking news is out of japan now where we're learning that workers have been evacuated by that nuclear plant at fukushima daichi in japan as smoke billows again from areact. let's get the latest from anna in tokyo. i believe this is from nuclear reactor number three. is that correct? >> reporter: that is right. >> we learned this news in the last few minutes, that all employees at the fukushima daichi nuclear power plant have been evacuated because of gray smoke from reactor number three. this is the reactor causing so many problems and of grave concern for the japanese. that's the one where they are spraying all that water into trying to keep it cool. they believe the pool keeps those spent fuel rods is very low on water, but that is where
they're seeing gray smoke coming from it, they don't know if it's steam or hydrogen gas. we have yet to confirm those details. they have announced they have evacuated all workers from the site. this is what we have learned just recently. before that, pauline, we found out that power had been restored to all six reactors, but only working in two, that was reactors five and six, that's from the backup generator that's been happening. one to four, power has been restored but, as we have learned, they have not been able to get that power going into the pumps just yet, get the pumps operating to cool down the reactors. three and four, we believe, are damaged, and that was due to the earthquake and also the tsunami, the sea water has corroded certain parts. so those parts before this evacuation, pauline, they were trying to replace those parts in both reactors three and four.
this is an ongoing situation, a fluid situation. certainly officials thought they had been able to stabilize the situation, but as one said to us yesterday, this is unpredictable and as what's happened in the last few minutes, it certainly shows. pauline? >> this is a setback because it seemed as if tepco, the power company and the government had been starting to get control over the situation, and the big milestone that they reached was trying to get electricity back to the reactors in order to try to cool down those areas to try to cool down the fuel rods. at this point, i realize this is still a fluid situation, do you foe what might have caused this smoke to billow again at nuclear reactor number three? >> we don't, pauline. as i mentioned, reactor three has been the problem reactor, as it were, to the officials on the ground, and to tepco, the
police, the fire department, to everybody involved. we know there was a build up of pressure in the reactor yesterday. they were concerned they would have to release, whether it be steam or hydrogen gas, they weren't quite sure, but by releasing whatever was building up within that reactor, it would be releasing radioactive material. so reactor three is the problem, and that is why with these latest developments they decided to evacuate the plant. pauli pauline? >> all right. thank you very much for that update. again, another fluid situation there with another setback at the nuclear power plant. we'll have more on the japan situation straight ahead. beyond the loss of life, we'll look at the damage the earthquake and the tsunami caused to the world's third largest economy. a new report has put a very hefty price tag on japan's latest natural disaster. [ female announcer ] sometimes you need tomorrow
welcome back to "world business today." to the latest developments on the earthquake and tsunami aftermath in japan. as we heard a few minutes ago, some kind of smoke has been coming out of that badly-damaged nuclear reactor number three at fukushima daichi, and workers, all the worker there's have been evacuated. this is video that you're looking at from saturday. the information we're getting in is just coming in about smoke at number three. this comes after authorities had reported progress, significant progress in cooling down those overheating nuclear reactors. they're pumping water on to the reactors at this damaged plant, and electricity cables have been connected to all six reactors. now, this is a major achievement because the power company has been trying to get this underway in order to cool down those nuclear fuel rods there, the spent fuel rods.
meanwhile, the disaster is hitting the food supply. japan is restricting food sales from the region around the fukushima daichi power plant after tests showed elevated radiation levels in spinach and milk. the economic cost of that record earthquake and tsunami is adding up in its latest report, the world bank said the total cost of the disaster could reach $235 billion, or up to 4% of japan's gdp. that's based on private estimates. it's more than double what it cost japan to clean up in kobe back in 1995. the world bank also said japan's growth will suffer into the second half of the year, but will gradually pick up as the country rebuilds. but that could take around five years. pauline? well, this week, hopefully, japan's auto manufacturing industry is planning to restart its parts manufacturing and
vehicle production plants. that's after last week's freeze on almost all operations in the quake-effected zone. this time last week auto stocks took a big hit, but they sped out of that dip last friday to try to regain some of the lost ground. what do you have for us, ramy? >> this week looks to be the week where japan's auto sector tries to restart engines. nissan today, toyota tuesday, honda wednesday. first to nissan, five of its parts manufacturing plants are supposed to be partially operational today. those parts are sent overseas for repairs and manufacturing. this thursday nissan aims to restart actual vehicle production. as for toyota, it will keep its 12 main assembly plants closed until at least tomorrow. japan's biggest automaker says that will delay the production of about 95,000 vehicles.
toyota is moving operations to central japan. those parts go mostly to overseas operations. and then there's honda, they are exte extending their own production freeze until march 23rd. that's after the company last week suspended honda and acura vehicle orders from dealers in the united states. these are the most recent updates from the companies, but they can change. they have in the past, and vehicle production will be limited by any parts shortages. as an example, toyota says one of its vehicles can have 30,000 parts. so if even one part is missing, it can't roll off the line and you probably wouldn't want to buy a car with a missing piece. >> no, i wouldn't. ramy, talking about rolling off the assembly lines, that brings us to one question about the conditions of the roadways. i hear there's a pretty interesting new tool trying to help from that aspect. >> that's right. honda has teamed up with toyota
and google earth to make this behind me. a road map for the relief and recovery effort across the region. this is made possible by car drivers themselves. they basically send in their own traffic reports to honda, honda updates that map. blue shows you all the roads congested. you can see that's closer in, we can see damage here in the red. this is all the quake and tsunami-effected region. this radius here is from the fukushima nuclear plants. it's a handy tool for everybody trying to navigate the region out there. >> all right. thank you very much. this is "world business today" here on cnn. we'll be right back after this break. ack? benadryl® is more effective than claritin® at relieving your worst symptoms and works when you need it most. benadryl®. you can't pause life. it seems like your life with rheis split in two.s,
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its first test flight from everett, washington and landed in seattle about four hours later. more test flights are scheduled before this plane gets certification. production of the new 747 and the mid-sized 787 dreamliner have been delayed. but lufthansa ordered 20 of the new jumbo jets. the plane's list price is just over $317 million. live from hong kong and from london, this is "world business today." obviously if you're going anywhere on business, you want to know what's going on with the weather. our meteorologist, jennifer delgado is at the cnn weather center, and there are a few problems with rain and snow. >> that's right. we are talking about the west coast and the east coast. today is the start of the vernal equinox. it started on sunday and we're still dealing with wild weather. on the west coast, dealing with heavy rainfall that's starting to taper off through parts of
california. spreading over to nevada and also some snow. for today, we will see showers and thunderstorms. potentially you could expect travel delays, especially with wind gusts kicking up to about 50 kph as we go throughout the afternoon. along with it, a foot of snow, talking mountain snow in some of the higher elevations. certainly things have not quieted down on the west coast. parts of oregon have been dealing with rain almost every day for the last month. this is part of the rainy season across the pacific northwest. as we look across the northeast, dealing with snow, wintry mix and rain showers due to a cold front. that approaching cold front is now also producing some of that wintry mix. on the radar, you can see snow winning out through parts of pennsylvania, as well as new york. we will continue to see this through our morning commute, if you are traveling through the northeast, potentially we could see travel delays if you're flying into or out of airports across the northeast as well as new england. let's talk about the totals.
we will see that snow coming down through parts of canada as well as coming down good through the new england area. potentially about 15 centimeters of snowfall at the same time the upper midwest dealing with another round of snow. higher there. some locations dealing with up to 25 centimeters of snowfall as we go through the next 24 hours. for the northeast as well as new england, we'll see that changing over to rain/snow mix and coming to an end as we head later into the evening. del delays for ottawa, snow in the morning, one and a half to two hours. regina also one and a half to two hours. for sweden, some rain and wind. turkey, not so bad. i want to leave with you something nice and positive. how about the moon over paris. this is time-lapsed video out of atlanta. look at how beautiful that moon it. that's not a regular moon,
that's what they call the "super moon." it was 14% bigger and 30% brighter at its peak. a beautiful shot, indeed. we had a lot of great i-reports about that as well. charles? pretty fancy. >> that is a lovely sight. quite super. jennifer delgado. thank you very much. >> you're welcome. we will take a look at the week ahead right now from crises abroad to the state's largest economy, let's walk you through some of the big stories this week. we'll start with monday, what's going to go on on monday, the 21st here. on monday, in the u.s., tiffany & company is due to report before the opening bell on wall street. the luxury jeweler has taken a hit from the disaster in japan. that's because the japanese market accounts for about 20% of tiffany's overall sales, second only to the u.s. then on wednesday, we are going
to get information out of the uk. british tax reform is expected to be top of the agenda on wednesday. and that's when the uk finance minister delivers his budget. speaking on sunday, george osbourne told the bbc it would be a huge mistake for the government to water down its austerity plan. then we look ahead to what's going to happen on thursday. now, the u.s. electronics retailer, best buy opens its books then. briefing.com forecast its earnings for the first quarter to be $1.85 a share. not bad. those results could give investors some direction on the demand for goods as oil and food prices continue to rise. then we look ahead to important data on friday. that's the health of the u.s. economy. that will take center stage on friday. that's when we get the third and final revision of the u.s. gross domestic product for the fourth quarter of 2010. this last reading showed that
the economy grew at an annual pace of 2.8%, down from that initial reading of 3.2%. this time around, analysts are expecting it to go in the other direction for a slight uptick. and right after the break, we'll come back to "world business today" and look at the situation in libya and how that's effecting oil prices this week. man: no way! man: hey rick check this out! anncr: geico. 15 minutes could save 15% or more on car insurance. before i started taking abilify, i was taking an antidepressant alone. most days i could put on a brave face and muddle through. but other days i still struggled with my depression.
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today." the libyan government is under an aerial siege now as airplanes from a 10-country coalition patrol the skies overhead. early anti-aircraft traces lit up the sky as coalition planes and missiles hit the anti-aircraft defenses. the coalition also attacked government troops on the outskirts of bengahzi. afterwards the libyan army calls for an immediate cease-fire. it's a call the coalition is not taking seriously. coalition airplanes also struck the compound where moammar gadhafi lives. spokesmen for the coalition say the libyan leader is not a target, his compound however, with its military capabilities is on the coalition's target s list. nick robertson gained access to the compound after the attack. >> reporter: she's saying this
is the proof, this is the proof they're holding our bits of what look like and from what i've seen before, look like pieces of a cruise missile. it's hard for us to confirm exactly what sort of weapon or missile this might be. it's also hard for us to confirm anything that we're being told about what this building was being used for. certainly the people here have gone inside the building. this lady pulling out more bits of debris. what she's saying is look at this. for them, this is proof this building was struck by some kind of a missile. can i have a look? can i have a look? okay. this is still warm. the writing on it says this equipment contains parts and assemblies sensitive to damage by electrostatic discharge, precaution when using. over here, it's hard to read.
looks like a serial number on the other side. let's look over here. control wires, maybe. hard to know exactly what it is. being shown something else over here. maybe part of something. this is what people here are telling us, showing us is part of a missile system. another part. let me have a long at this. this is from the outside. certainly seen a few cruise missiles before. this certainly has the look of a weapon, of a missile about it. again, can't confirm exactly what it is. on this side, serial numbers, seems to have been made on november 29th, '06. serial number. but impossible to really know what it is. so, a lot of anger here that
this building has been hit, inside a compound that the pentagon earlier said wasn't a target. hearing that from the government spokesman there. people very frustrated about why this is happening, and apparently hitting targets that were, they understood, off limits. frustration, too, they say, because not long before this missile hit, an hour and a half before, they had reannounced their cease-fire. nic robertson, cnn, labia. for another perspective we have ivan watson joining us from cairo. that's where the arab league initially approved of the coalition attacks on libya is giving a different sort of response. what is your understanding of the different response? >> reporter: i think it's clear that the u.n. security council
would have won passage for a resolution of a into fly zone without the arab league calling for that as well as the gulf council also calling for some kind of no-fly zone. very confusing then when the secretary of the arab league came out over the weekend, sunday, being quoted saying that what we want is protection of civilians, not the shelling of more civilians. basically arguing that the air strikes and the cruise missile strikes that have been carried out had gone beyond the initial mandate calling for a no-fly zone. a meeting took place yesterday here of the arab league, and afterwards the chief of staff came out saying we fully support the implementation of a no-fly zone. what is clear is we have not heard a ringing endorsement coming from arab countries of
the commencement of military operations against colonel moammar gadhafi's regime. instead we're seeing an operation led by european and north american powers, and only qatar and the united arab emirates of the arab countries in the world coming out saying they'll participate in this coalition against moammar gadhafi. >> ivan, the arab league has said it agrees with the official purpose of the no-fly zone, which is to protect libyan civilians. but is the league's goal also to remove gadhafi from power? or is that something they would not want to say publicly? >> that's certainly not something they have said publicly. they have talked about protecting civilian lives in libya. that's probably where some of the criticism has come out with certainly claims coming from gadhafi government that civilians have been hit in these
air strikes and cruise missile strikes. those are claims that are being disputed by some of the western governments who have been carrying out the attacks. it's interesting, we've gotten a quote from the gulf cooperation council which has been more hawkish on this, the six nations there. the secretary-general quoted by dow jones as saying what is happening now is not an intervention, it's protecting people from bloodshed. that's a stronger line there. you will face a problem of legitimacy as long as there is really not an arab presence within -- a stronger arab presence within this action. when you talk to people on the streets in tunisia, where i just was a couple days ago, which experienced a revolution and had sympathy for the protesters protesting against moammar gadhafi, here in egypt, you see splits. some people saying moammar
gadhafi was killing his own people. intervention was necessary. then perhaps another side of -- you could argue, which is very suspicious of western military power in the arab world after seeing the experience in iraq prior to that, seeing libya, an oil-producing country, very suspicious this could be an effort to fight and gain control of those massive oil and natural gas resources there. that's going to be a battle of public opinion that will have to be waged in the days and weeks ahead. pauline? >> ivan, from the people that you're speaking with, looking later on down the line into the near future, if gadhafi is removed from power, what's your sense of what the arab league or the gulf cooperation council envisions for a new regime in libya? what would libya look like under
a new leader? >> i think it's too early to say. we have to keep another thing in mind here, pauline. the arab league, many of the governments that are represented in it are themselves not exactly democratic-free states. the leaders of many of these arab countries are also faring -- facing serious challenges to their own legitimacy from popular uprisings in their own countries. you know, this arab spring, as some people have called it, has spread like wildfire across the region and it is scaring some of these governments. while some of them are stepping out and denounced moammar gadhafi's tactics, at the same time they may not want a lot of analysis or close look at what they themselves are doing in an effort to try to project their own regimes from these democratic uprisings that are unprecedented across this
region. they are playing a very interesting game right now, wanting to perhaps bolster their credentials within their own populations by getting rid of a dictator who is unpopular around the world, certainly with the tanks opening fire on unarm prod testers in libya, and at the same time not wanting to strengthen the only democratic protest movements that have sprung up in their own countries and challenge their rule. pauline? >> yeah, some great points there. ivan watson reporting live from cairo, thanks. charles, all of the events that have unfolded over the weekend have certainly effected the oil prices we're seeing now in electronic trading. charles? >> absolutely. one high-profile casualty of all that strife in libya is the oil industry. oil production that not come to a complete halt, but according
to the oil minister, libya is only produce being a quarter of its normal output of crude oil. to stem the losses it is urging all libyan oil workers to return to their jobs. we'll be back with a check of the stock markets in a moment. about the world. and yourself. ♪ this is the age of knowing what you're made of. and knowing how to get things done. so, why would you let something like erectile dysfunction get in your way? isn't it time you talked to your doctor about viagra? 20 million men already have. with every age comes responsibility. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. side effects may include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. you didn't get to this age by having things handed to you.
president obama is in brazil trying to warm up relations between the two countries. there's been some friction between the united states and brazil on the issues of trade and foreign policy. >> in a global economy the united states and brazil should expand trade, expand investment, so that we create new jobs and new opportunities in both of our nations. that's why we're working to break down barriers to doing business. that's why we're building closer relationships between our workers and our entrepreneurs. >> his speech got a good reception, especially when a spoke a few words in portuguese but also plenty of protesters
demonstrating against the president. welcome back to "world business today." let's see what's going on in europe where the markets opened today with some gains. we're now about 45 minutes into the trading day. and here is where they stand at the moment. looking at gains of more than -- actually, here we are, dax going great guns up, up by 2.25%. zurich, nearly 2% to the good, as is the paris cac, london ftse up by 1.2%. pauline? >> here in asia, it was nice to see a day of gains and markets were also mostly higher. hong kong and seoul were the top performers on this monday session. each gaining more than 1% by the close. energy stocks were up across the region on the back of the higher oil prices that we've been talking about. mining and uranium stocks helped to give the benchmark a boost in
sydney. markets in japan were closed for a public holiday. wall street looks set for a strong open when trading begins later on monday. here are the u.s. futures predictions. up by about 1%. a bit more than that for the nasdaq. and a little bit less than that for the dow and the s&p 500. now to our european if not global markets, joining me is the chief economist and head of strategy at ing investment management. these are volatile times. do you expect the markets can make progress this week? >> i think it looks like they can, indeed. of course markets are currently very much in, let's say, tail risk management mode. and some of those tails seems to be coming off in japan. we have seen indications that the situation at the nuclear power plant is gradually getting better, therefore, i think, some
of the risk premium associated to japan will be priced out of the market in the rest of the week. >> okay. so this could be looking like a buying opportunity in japan then? >> it could very well be. i think a lot of people have been approaching the situation in japan as a buying opportunity in a sense that as soon as the uncertainty comes down to more comfortable levels surrounding the nuclear story, which nobody feels comfortable with reading, as soon as that happens, they want to be stepping into that market. >> okay. let's look at the situation in libya. clearly that is volatile. things are moving quite fast. it's also pushing up the price of oil. presumably that is the big unknown as far as markets are concerned. >> well, i think it's the biggest unknown. also because it ties into oil and in the end, for a more negative outlook for the global economy, it's not so much japan, but it is oil prices that will be the swing factor. and then with respect to libya,
i think the situation there, to some extent is priced in by now. the key thing to watch is still contagion into other oil-producing countries. >> okay. let's look at the real economies in europe. can one be reasonably confident f there is a slightly higher oil price, and that seems to be a reality, will that impact growth and thereby market performance? >> well, it's going to impact growth. let's not forget that majority of the rise in oil that we've seen so far is really demand driven. basically a reflection of a strong global economy and the reflection of a surprising resilient european economy. only about maybe $10, $15 of the rise in oil is related to the supply side worries. if that's all that we're going to see, i don't think it will undermine the recovery in europe and probably will be more important what's going to be happening at the european summit at the end of the week than what's going to be happening to oil prices, if they stay at current levels. >> you speak of the european
summit. one of the issues, the cloud hanging over europe is the european crisis, the debt and deficit crisis. are you or the markets generally taking a more relaxed position about that despite all the downgrades that we've seen in portugal and so on in other countries over the last couple of weeks? >> i would say that's the case. we've become more comfortable about a month ago, especially on the situation in spain, here for europe and the spain is the swing factor. don't forget as well with respect to the downgrades, through the credit crisis they have not been the leading indicators of where markets would go. i agree with you that markets and investors are getting a bit more comfortable with that situation. as the result of this summit seems to be pretty okay. >> okay. thank you for joining us. we will take a break there. stay with us. we'll be back after this.
live from cnn hong kong and london, this is "world business today." we want to update you on the situation in libya. here is the latest. the compound of libyan leader moammar gadhafi has been badly damaged by a missile strike. the coalition says the facility was targeted because it serves as an armed forces command and control center and the goal of the u.s. coalition is to degrade libyan military capabilities. it is unclear where gadhafi is now. a military official says the u.n.'s no-fly zone is in place in libya. coalition air strikes have done major damage to the country's fixed air defense systems. that's the latest there. charles? well, back now to the story that is going to be dominating the corporate headlines in the course of the day, and certainly will be giving cause for talk on wall street, that's the big u.s.
telecoms deal, possible at&t/t-mobile merger deal. emily what is the significance of this deal? >> it will change the landscape of the mobile phone companies in america, effectively shrinking them down from four main providers to three main providers. >> so basically t-mobile usa is being bought by at&t for $39 billion. why does at&t want to do that? >> this is a huge deal for them. let's look at the numbers, and it may show you why they want this deal to go ahead. they currently have 96 million customers. if this deal goes ahead, that will go up to 130 million customers. that would give them more than verizon. this solves pending problems for at&t. they had been facing a capacity crunch. in justifying this deal they say
it enhances network capacity. there are clearly going to be regulator issues that we can talk about. the chairman and ceo is confident the deal will go through. listen to what he has to say about the deal. >> the purpose of this transaction is that you have two companies who have very complimentary spectrum which is very valuable in this industry to bring the services to market. the spectrum is complimentary. the networks are very complimentary. we are on the same technology. we can put the spectrum and the technology together and this produces something that no other transaction produce, an immediate lift to capacity, an immediate improvement to service quality it will allow us to build lte across 95% of the united states as a result of this transaction. >> clearly a lot of enthusiasm there and a big price is that why deutsche telekom going to go
through with the deal? >> both boards agreed to the deal, but getting the regulators to approve is another ball game it has to be approved by the department of justice and the federal communications commission. in february of last year they said they were worried about the concentration of ownership of the mobile phone market in the u.s. and at&t and verizon between them will have three quarters of all subscriptions. sprint has already come out expressing concerned. they are concerned that they own the infrastructure that other carriers rely on and consumer groups are expressing concerns. there's a long way go before this deal gets the okay. >> okay. emily, many thanks. pauline? charles, of course we'll have more on this at&t and t-mobile deal in a couple of hours. in the meantime, that's it for this edition of "world business