AT&T Tucks Its Tail Between Its Legs, Abandons T-Mobile Acquisition
December 19, 2011 4:50 PM
comment(s) - last by
AT&T likely bit off more than it could chew
In the past few weeks, it's becoming increasingly clear that AT&T was facing an uphill battle with regards to its wishes to
acquire T-Mobile for $39 billion
. Today, finally AT&T realized that its efforts were likely futile considering that it was getting plenty of pushback from both the
Department of Justice
The company announced in a statement that it is giving up its quest to purchase T-Mobile:
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.
As witnessed by AT&T's statement above, the company is confident that the FCC and the DOJ have made a big mistake by blocking the merger and contends that customers will be the ones that will be hurt in the long run.
AT&T chairman and CEO Randall Stephenson [Source: International Business Times]
“AT&T will continue to be aggressive in leading the mobile Internet revolution,” said Randall Stephenson, AT&T chairman and CEO. “To meet the needs of our customers, we will continue to invest. However, adding capacity to meet these needs will require policymakers to do two things.
“First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC. Second, policymakers should enact legislation to meet our nation’s longer-term spectrum needs."
As a result of the agreed upon "breakup" fee, AT&T will now have to pay $4 billion to T-Mobile parent company Deutsche Telekom AG.
This foreseeable outcome became even more clear this morning when
The Wall Street Journal
reported that AT&T was
having difficulty in selling over 30 percent of the assets
in the proposed $39 billion deal to Leap Wireless International Inc., Dish Network Corp., and MetroPCS Communications Inc.
The Wall Street Journal
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RE: A Dish Best Served Cold
12/19/2011 6:40:46 PM
Um, T-Mobile practically grew out of nothing a decade ago and while they're currently in 4th place in overall subscribers, they've been competing against much larger firms that have been consolidating and buying out(AT&T/Cingular, Verizon/AllTel/et al, Sprint and its subisidiaries) that originated from existing landline telecoms.
The fact that they've become a national player and maintain relatively good customer service standings (especially compared to AT&T) in a market dominated by this old American telecom infrastructure+money makes it a unique player on the market and suggests that they invested in their network fairly intelligently and are still successful and competitive as a business.
DT may want to sell to accomplish other business goals, but
RE: A Dish Best Served Cold
12/19/2011 9:49:01 PM
Grew out nothing? DT bought Voicestream/Powertel for over $50 billion and rebranded it...and Voicestream itself was just a bunch of patched together regional carriers and the old Sprint Spectrum network. And all their hardwork and additional money invested resulted in a company worth just under 4/5 as much as their original investment. Yeah....they're a "unique player" and "successful".
"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
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