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BREAKING: AT&T and T-Mobile Deal Is A Bust, And AT&T Takes A Hit In The Pockets

December 19, 2011

Well it look as though the AT&T/T-Mobile conglomerate that was thought to become a reality is now more of rumor if anything else. AT&T released a letter to the public stating that they will be dropping the deal to try to merge with T-Mobile. Back in March, AT&T started their campaign to set the wheels in motion to have the merger go through. If AT&T and T-Mobile were to merge, it would’ve made them the biggest mobile company in the United States. While AT&T had big plans for this thing to go through, other companies didn’t have the same bright spot in mind.

Sprint was the first to speak up and oppose the merger, fearing that the combination of the two companies would provide an unfair advantage against smaller companies (like Sprint). The Department of Justice was also opposed to the idea of AT&T and T-Mobile merging together. The deal that would combine two major players in the mobile market would have been 39 billion dollars but since the deal has fallen through, the penalty for the “no-deal” will end up costing AT&T $4 billion bucks. But how do you feel about the AT&T/T-Mobile deal falling through? Were you looking forward to the combined company?

Here is the press release issued by AT&T below. 


AT&T Ends Bid To Add Network Capacity Through T-Mobile

USA Purchase

Company Reaffirms Its Commitment to Mobile Broadband Leadership

DallasTexasDecember 19, 2011


AT&T Inc. (NYSE: T) said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year.

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.

“AT&T will continue to be aggressive in leading the mobile Internet revolution,” said Randall Stephenson, AT&T chairman and CEO.  “Over the past four years we have invested more in our networks than any other U.S. company. As a result, today we deliver best-in-class mobile broadband speeds – connecting smartphones, tablets and emerging devices at a record pace – and we are well under way with our nationwide 4G LTE deployment.

“To meet the needs of our customers, we will continue to invest,” Stephenson said. “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.

“The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces,” Stephenson said.

To reflect the break-up considerations due Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011.  Additionally, AT&T will enter a mutually beneficial roaming agreement with Deutsche Telekom.

One Comment leave one →
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