AT&T Gives Up on T-Mobile Acquisition

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I sincerely hope that the US DOJ prevents everyone who said they should prevent this merger from spending any money ever again. Then they can reap what they sow.

 

[KPOM]

If I understand this bit, since it is tax deductible, guess who picks up part of the tab for this little debacle.

Don't I love paying for corporate *****k-ups.

That's not entirely true. Essentially, since their profits will be lower, so will their taxes. That's just simple math. Companies pay taxes on their net taxable income. This isn't a loophole.

Plus, T-Mobile will wind up paying taxes on their $4 billion windfall from AT&T. What they pay would effectively offset the tax deduction AT&T gets.

 

[rjlawrencejr]

i don't really understand the animosity toward at&t. t-mobile is going to be bought out at some point, and at&t makes the most sense in terms of compatible technology.

at&t and verizon are pretty much the same in terms of price, and depending on where you live, coverage pretty much dictates which one you'd choose. sprint is awful about everywhere (based on my experience and others i've known). t-mobile will be bought out by someone or go bankrupt, so they're really not worth the risk, in my opinion.

why is at&t the recipient of so much hatred when compared to the other companies?

Let's see, the bigger the company, the less incentive there is innovate. I don't necessarily believe the animosity was directed towards AT&T singularly (no pun intended), but towards the prospect that you essentially would have two behemoths (we are practically there already) and little choice for consumers.

And if there was any animosity directed toward AT&T specifically, I believe it was because people saw the company's spin on the merger as completely disingenuous.

Sure you can switch carriers until you're blue in the face, but the system as it stands in the US is already stacked against consumers since switching between carriers is not an easy task at all.

 

[macjoshua]

Fair or not, the wound is deep in people's memory of AT&T's legacy- their monopolistic behavior. It's well documented how their landline business harmed people, crushed competitors, and made a public necessity (communications) an overbearing expense. And when the government broke them up, there was a wave of innovation and competitive pricing. History is not lost on those who remember.

Isn't Verizon one of the remaining Bell companies as well?

 

[Detlev_73]

Yet another example of government meddling in things it has no business in.

 

[Routerninja]

Isn't Verizon one of the remaining Bell companies as well?

Yep. Bell Atlantic to be exact.

 

[rjohnstone]

Very glad to hear this news. However, I am still sad that the taxpayer is still paying for this as the fee that AT&T is giving to T-Mobile is tax deductible. No matter how you look at it, we still get screwed in some way.

Again.. the taxpayer is not paying for this.
Geez you people need to learn how business deductions work.
If anything, AT&T customers will absorb the costs via higher fees.

 

[Routerninja]

No matter if you were for it or against it doesn't change the fact that T-Mobile will be going away sometime. The parent company of T-Mobile (USA) has been losing money / customers and has said they are getting rid of the company. Since AT+T is out, either Sprint will buy the company or the T-Mobile assets will be sold off at fire sale prices. I'm not a T-Mobile shareholder but I'm sure that most of T-Mobile shareholders are not happy since they are now likely to get very little for their shares. I currently like and subscribe to T-Mobile but I recognize it's on its way out.

Yep. No matter how this shakes out, the only remaining suitors for merger in the US are CDMA carriers and they will keep the spectrum and customers and sell off the towers.. to who? The only company that can use them, because it would cost them more to retrofit everything than to just sell them outright.

 

[rjlawrencejr]

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I sincerely hope that the US DOJ prevents everyone who said they should prevent this merger from spending any money ever again. Then they can reap what they sow.

I'm not sure I understand your comment.

 

[KPOM]

Fair or not, the wound is deep in people's memory of AT&T's legacy- their monopolistic behavior. It's well documented how their landline business harmed people, crushed competitors, and made a public necessity (communications) an overbearing expense. And when the government broke them up, there was a wave of innovation and competitive pricing. History is not lost on those who remember.

Actually, this AT&T isn't the same as the old one. It's the old Southwestern Bell (SBC Corp), which was one of the companies created when AT&T split up back in the early 1980s. Arguably, the government botched up that breakup process, creating too many small companies that eventually merged back together, creating Verizon (formerly Nynex, Bell Atlantic, et. al), AT&T (formerly SBC, Bell South, Ameritech, et. al), and CenturyLink (formerly QWEST).

In retrospect, we may have been better off if the US government did the same thing that European governments did and simply open up the US market by letting in large foreign companies (BT, France Telecom, Deutsche Telecom, Bell Canada). Arguably that's how the European communications market (including wireless) got to be so competitive.

 

[Michael Scrip]

I don't know how it works either, but I have to believe the consumer would not have benefited from an all-out merger.

The irony is that I distinctly remember T-Mobile and Cingular having reciprocal agreements in some parts of the country when T-Mobile first hit the scene back in 2002.

You could be right that this will make it harder for AT&T to roll out the next generation of wireless services, but I still believe another type of agreement could have been reached without decimating a competitor.

Yeah... fewer carriers isn't good either.

But if T-Mobile fails anyway... we'll be in the same place.

 

[RalfTheDog]

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.

You can't just build new towers. You need to get the cities to grant you the right to the tower and you need spectrum to run it.

T-Mobile USA isn't going broke, are they?

Deutsche Telekom owns them anyway...

T-Mobile USA can't be doing as bad as Sprint... Sprint hasn't made money in years!

T-Mobile is dead. They priced themselves below their cost of operation and they ran out of money.

Well, if all AT&T wanted was access to T-Mobile's 10,000 towers, they could have accomplished that with a reciprocal agreement. Of course AT&T would never have wanted that since it would have actually led to increased competition.

Forgeting the technical issues (and assuming the reciprocal agreement was not shot down by the FCC or the FTC), it would be extremely asymmetric. ATT would be providing quite a bit while they would be getting much less.

The fact is, T-Mobile is dead. Their only chance at survival was to be merged into a larger company. For technical reasons, that could only be AT&T. Now T-Mobile will shut down in the very near future and AT&T will purchase the towers and spectrum at auction. This will cost everyone in the long term.

 

[boomhower]

That $4B is really going to hurt their ability to keep up with Verizon in the spectrum race. They should have never went down this path. It's an expensive lesson.

 

[foiden]

I worry about T-mobile. Hmm. AT&T backs out, but I guess they could still take over GSM if something were to happen to T-mobile.

Hopefully, T-mobile execs don't have any Accidents in the next several months. And if you think this kind of business isn't one people would "off" people for, think again. Phone service is mafia territory.

 

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I sincerely hope that the US DOJ prevents everyone who said they should prevent this merger from spending any money ever again. Then they can reap what they sow.

I'm not sure I understand your comment.

I'm saying that I hope all the people who say that AT&T doesn't have the right to make a voluntary transaction lose their rights to voluntary transactions.

 

[rdowns]

I worry about T-mobile. Hmm. AT&T backs out, but I guess they could still take over GSM if something were to happen to T-mobile.

Hopefully, T-mobile execs don't have any Accidents in the next several months. And if you think this kind of business isn't one people would "off" people for, think again. Phone service is mafia territory.

Where do people get this stuff?

 

[RalfTheDog]

I wonder how much Verizon paid for this outcome?

 

[425]

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I wonder how much Verizon paid for this outcome?

They probably didn't have to, the boneheaded government would have done it anyway.

 

[iBreatheApple]

Noooooooooooo.

 

[Michael Scrip]

T-Mobile is dead. They priced themselves below their cost of operation and they ran out of money.

When this whole thing started a long time ago... people were saying "T-Mobile USA is profitable so why would Deutsche Telekom want to get rid of it?"

That's why I was confused.

Since T-Mobile USA is failing... they needed this merger/acquisition. But the US Government prevented that.

So now what? T-Mobile USA is still in trouble.

 

[rjlawrencejr]

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I'm saying that I hope all the people who say that AT&T doesn't have the right to make a voluntary transaction lose their rights to voluntary transactions.

You are kidding, right?

While you may have a different ideology, I believe you know full well why this merger seemed distasteful.

 

[ThomasJL]

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The MDM6610 chip in the iPhone 4S supports T-Moblie's 1700 MHz 3G HSPA+ band. Since Apple was greedily rooting for AT&T to acquire T-Moblie, Apple disabled the iPhone 4S's support for T-Moblie's 1700 MHz HSPA+ 3G band.

Do any of you think Apple may now finally enable the 1700 MHz band and offer the iPhone 4S to T-Moblie?

 

[Shrink]

That's not entirely true. Essentially, since their profits will be lower, so will their taxes. That's just simple math. Companies pay taxes on their net taxable income. This isn't a loophole.

Plus, T-Mobile will wind up paying taxes on their $4 billion windfall from AT&T. What they pay would effectively offset the tax deduction AT&T gets.

Thanks for the correction.

I guess I didn't understand that bit correctly.

(Got a C in Econ 101.)

 

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I'm saying that I hope all the people who say that AT&T doesn't have the right to make a voluntary transaction lose their rights to voluntary transactions.

You are kidding, right?

While you may have a different ideology, I believe you know full well why this merger seemed distasteful.

I know why you might not be a fan of it, but I don't know why you think that you have a right to tell AT&T what it can and can't do with its money.

 

[Hastings101]

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I know why you might not be a fan of it, but I don't know why you think that you have a right to tell AT&T what it can and can't do with its money.

Because this is a forum, where people give their opinion on everything. Thought that one was kind of obvious...