AT&T's Efforts to Sell Off T-Mobile Assets Stall
December 19, 2011 11:18 AM
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AT&T looked into selling off T-Mobile assets to other carriers like Leap Wireless International, Dish Network and MetroPCS Communications
AT&T and Deutsche Telekom's attempt to sell off T-Mobile assets to other carriers in order to boost AT&T's $39 billion acquisition have stalled, making the deal seem even less likely to pull through.
AT&T entered a $39 billion deal to buy T-Mobile from Deutsche Telekom in March 2011 after Deutsche Telekom decided it wanted to exit the U.S. market. AT&T was all for it because it could get its hands on T-Mobile's wireless spectrum. However, the
U.S. Justice Department saw the deal as an anticompetitive act
, and launched a lawsuit against the mobile companies in August. The U.S. Federal Communications Commission (FCC) later joined the battle against the AT&T/T-Mobile deal.
AT&T has done almost everything in its power to save the deal, from
fighting the U.S. government in court
spending extra cash
. It looked into selling assets worth more than 30 percent of the deal's value to Leap Wireless International Inc., as well as other assets to Dish Network Corp. and MetroPCS Communications Inc.
Despite these efforts, the likelihood of the U.S. Justice Department changing its mind about the deal is slim. AT&T and Deutsche Telekom have recognized the bleak
possibility of a failed deal
, and recently put the court battle with the Justice Department on hold in an effort to seek out alternatives to the deal. AT&T even withdrew its merger application that was sent to the FCC.
AT&T and Deutsche Telekom must come up with a plan by January 18 when they meet with regulators. A couple alternatives to the merger would be a joint venture between AT&T and T-Mobile, or AT&T could leave T-Mobile alone entirely and go after a smaller carrier. But it is unclear whether the companies will continue fighting for the merger or withdraw completely.
The Wall Street Journal
This article is over a month old, voting and posting comments is disabled
12/19/2011 12:18:47 PM
Short version: AT&T works with smaller companies to finalize sales agreements for parts of the T-Mobile infrastructure and/or assets in advance. When AT$T completes the T-Mobile purchase those assets are then distributed according to the pre-existing agreements.
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