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Apr 12, 2001
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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
 

PlaceofDis

macrumors Core
Jan 6, 2004
19,241
6
they should have given up months ago. you could tell even then that this wasn't going to happen.
 

neiltc13

macrumors 68040
May 27, 2006
3,119
12
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? :confused:
 

b24pgg

macrumors 65816
Jan 28, 2009
1,108
0
CA
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

macrumors 68040
Dec 28, 2007
3,801
4,244
PHX, AZ.
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

macrumors newbie
Mar 13, 2011
12
0
This is great news for the consumer, as long as the communication industry is driven by private enterprise.
 

3bs

macrumors 603
May 20, 2011
5,432
23
Dublin, Ireland
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? :confused:

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

davewyman

macrumors newbie
Mar 13, 2011
12
0
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? :confused:

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

spazzcat

macrumors 68030
Jun 29, 2007
2,877
1,819
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...
 

rjohnstone

macrumors 68040
Dec 28, 2007
3,801
4,244
PHX, AZ.
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.
 

MJedi

macrumors 6502a
Dec 16, 2010
862
334
In the absence of such steps, customers will be harmed and needed investment will be stifled.
Oh please, AT&T. :rolleyes: 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. :rolleyes:
 

cvaldes

macrumors 68040
Dec 14, 2006
3,237
0
somewhere else
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? :confused:
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

macrumors regular
Jun 6, 2011
127
0
East Lansing
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

macrumors 6502a
Nov 12, 2003
876
0
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? :confused:

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.
 

bwillwall

macrumors 6502a
Dec 24, 2009
899
568
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? :confused:

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

macrumors 6502a
Jun 13, 2007
550
361
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

macrumors 68020
Apr 15, 2004
2,439
116
Washington DC
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

macrumors G4
Mar 20, 2003
11,824
5,534
Bay Area
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

macrumors member
May 6, 2011
67
1
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?
 
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