AT&T Gives Up on T-Mobile Acquisition

[MacRumors]

​

AT&T announced today that the company would end its bid to acquire T-Mobile USA.

The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.

The acquisition intention was announced back in March, 2011. Under the original terms of the deal, AT&T would have paid $39 billion in cash and stock. The deal, however, was heavily criticized in an analysis by Federal regulators who believed that the merger would limit competition in virtually every U.S. city and lead to higher prices for customers.

AT&T now owes T-Mobile parent company Deutsche Telekom $3 billion in cash plus $1 billion in spectrum (at market rates) as a breakup fee for the failure of the merger. However, the Wall Street Journal reports that AT&T's bottom line will not feel the full brunt of the cost because it should be fully tax deductible, meaning the cash hit of the breakup fee would be closer to $1.5-$1.8 billion.

Article Link: AT&T Gives Up on T-Mobile Acquisition

 

[0dev]

Predicable.

 

[PlaceofDis]

they should have given up months ago. you could tell even then that this wasn't going to happen.

 

[Sixtafoua]

YESSSS!!!!!
I don't think anyone liked this idea.

 

[barkomatic]

Maybe Apple could buy T-mobile. Unlimited data for 99 cents!

 

[neiltc13]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

 

[b24pgg]

The fact that it even got as far as it did is a huge concern. A deal of this magnitude should never have even gotten off the ground.

 

[rjohnstone]

So the back out money from AT&T should keep T-Mobile out of bankruptcy for what... another year, two tops?

AT&T will get the parts they actually wanted in the bankruptcy sale and probably save a few billion in the process.

 

[davewyman]

This is great news for the consumer, as long as the communication industry is driven by private enterprise.

 

[3bs]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

How is reducing competition a good thing? You'd be ok with paying more just to have nicer stores?

 

[davewyman]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

Why would reducing competition be a good thing? It's what helps keep prices down.

 

[spazzcat]

So the back out money from AT&T should keep T-Mobile out of bankruptcy for what... another year, two tops?

AT&T will get the parts they actually wanted in the bankruptcy sale and probably save a few billion in the process.

The company will send the money to Germany and close up shop next year in the US...

 

[b24pgg]

How is reducing competition a good thing? You'd be ok with paying more just to have nicer stores?

Why would reducing competition be a good thing? It's what helps keep prices down.

I'm pretty sure the guy who said that was trolling. And if he's not, he needs to read this.

 

[rjohnstone]

How is reducing competition a good thing? You'd be ok with paying more just to have nicer stores?

T-Mobile is going under. They're bleeding customers in droves.
Their exit from the U.S. market is only prolonged a little longer with the AT&T back-out money.

 

[azentropy]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

I guess because in the USA we don't consider "reduced competition" a good thing!

 

[MJedi]

In the absence of such steps, customers will be harmed and needed investment will be stifled.

Oh please, AT&T. Cry me a river.

You mean, AT&T's finances will be harmed and needed money for our new yachts and vacation homes will be stifled.

 

[cvaldes]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

The UK has more carriers to begin with. Even after the Orange/T-Mobile UK merger, you still have five carriers.

The USA only has four nationwide mobile operators. The AT&T/T-Mobile USA merger would have reduced this to three. There is a strong argument in saying that this would have reduced competition, and more importantly, probably would result in price increases for consumers.

 

[bgtrack]

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Mobile/9B5127c)

Like no one saw this coming...

 

[dashiel]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

It would have left effectively two almost monopolies, in the two major spectrums in the United States: Verizon CDMA; AT&T for GSM. I think that was the big thing, now you have options Sprint/Verizon and T-Mobile/AT&T.

Of course what most have failed to note is T-Mobile isn’t going to make it. The speculation was they don’t see the end of 2012, but the cash infusion from the failed AT&T bid might sustain them through 2013, when they’ll declare bankruptcy and put their assets up for sale, where AT&T will be able to buy them, probably at a discounted rate – though Verizon might decide to bid just to make it expensive.

 

[imwoblin]

AT&T to take a $4 billion charge on failed merger, wow!

 

[bwillwall]

T-Mobile merged with Orange in the UK and that reduced competition and they made their stores much nicer. Why was everyone in the USA against this?

AT&T is terrible and expensive, that would have the same effect on current T-Mobile users, besides, less competition is not a good thing for the consumer. No matter how blunt of a jerk statement AT&***** makes. They are way too big of a company and imo should just leave the cell industry because the whole world would benefit.

 

[CyberBob859]

I wonder how much further along AT&T would be in their LTE rollout if they just took the $39 billion and invested it in wireless infrastructure versus trying to buy T-Mobile.

 

[Diode]

The UK has more carriers to begin with. Even after the Orange/T-Mobile UK merger, you still have five carriers.

The USA only has four nationwide mobile operators. The AT&T/T-Mobile USA merger would have reduced this to three. There is a strong argument in saying that this would have reduced competition, and more importantly, probably would result in price increases for consumers.

Not to mention cost reductions for AT&T with little incentive to pass those savings on to the consumer.

 

[QCassidy352]

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A405 Safari/7534.48.3)

Anyone celebrating this (and who was opposed to the merger) needs to understand that governmment meddling cannot change the reality of this situation, which is that tmobile USA is going under. Their German parent will either close up shop now or ride it out another little while, but tmo is done in the US. The reduced competition everyone is so concerned about is coming one way or another.

 

[dasams]

roaming agreement?

"Additionally, AT&T will enter a mutually beneficial roaming agreement with Deutsche Telekom."

Could this be the answer to my awful service in SF?