AT&T ends bid to acquire T-Mobile USA

AT&T announced late today that it will no longer try to acquire T-Mobile USA. The planned merger of the second biggest wireless provider in the US with the fourth largest was first announced in March 2011. AT&T said at the time it would pay $39 billion to purchase T-Mobile USA from its parent company Deutsche Telekom. AT&T added it would use the acquisition to help expand its plans for a faster LTE network.

However the merger plans were almost immediately met with resistance from other parties, including the nation's third largest wireless carrier Sprint. In August the Department of Justice filed a lawsuit against AT&T, claiming that the merger would cause less competition in the wireless phone industry. In November the Federal Communications Commission issued a report that was also highly critical of the planned merger.

In today's press release AT&T said that the actions of the two government agencies would cause issues with being able to increase the amount of spectrum needed for future wireless expansion. AT&T said, "In the absence of such steps, customers will be harmed and needed investment will be stifled."

Randall Stephenson, the chairman and CEO of AT&T said that even though the merger has been called off the company will still continue to invest in expanding its wireless infrastructure. He added:

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.

AT&T will now take a $4 billion charge in the fourth quarter of 2011 due to the cancelation of the T-Mobile merger. It added that it would team up with Deutsche Telekom on a "mutually beneficial roaming agreement."

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19 Comments

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The TMo prepaid plan is the bee's knees. 1yr expiration on minutes, with rollover. I was sure it'd be killed by ATT.

AT&T keeps claiming that the consumers would benefit from the deal because of more cell towers, better reception and better data speeds. However I don't feel that that is what Tmobile customers necessarily want. I have enjoyed 10 years of Tmobile with great customer support, I can't say that I have heard consistant good reviews for AT&T. It seems all they want is to increase their subscriber share. If the merger were to include better reception, more data, plan pricing = to tmobile, better phone pricing AND friendly customer support I would be all for it, but Im afraid that wouldn't be the case.

AT&T really needs to get their own house in order before going out and acquiring other companies. To wit: (a) land line repair service is rather casual, assuming you can even reach a "live person" to file a phone outage report. (b) U-verse with buggy TV software (c) general inability to reach a "live person" for land line or cell phone service.

TsarNikky said,
AT&T really needs to get their own house in order before going out and acquiring other companies. To wit: (a) land line repair service is rather casual, assuming you can even reach a "live person" to file a phone outage report. (b) U-verse with buggy TV software (c) general inability to reach a "live person" for land line or cell phone service.

I believe that's by design... lol AT&T could probably employ half the country in their call centers if you could actually reach people...

JianBing11 said,
LOL @ AT&T for having to give away 4 billion for nothing.

Oh i doubt it was for nothing. They are sharing spectrum and im willing to bet something is going on under the table..

micro said,

Oh i doubt it was for nothing. They are sharing spectrum and im willing to bet something is going on under the table..

I bet there is something going on under the table too. They could easily have made a deal about how to spend the $4bn before this whole thing started just in case the deal doesn't go through. Contingency planning.

Jebadiah said,

I bet there is something going on under the table too. They could easily have made a deal about how to spend the $4bn before this whole thing started just in case the deal doesn't go through. Contingency planning.

As per the merger agreement, if it did not go through AT&T was to give T-Mobile a sizable chunk of cash ($ 4bn), and if memory serves, they were also to gift T-Mobile some of their spectrum... They weren't getting anything for it... I think T-Mobile believed it wouldn't go through honestly.

I'm shocked!!! :-o <----- That's my shocked face!

Just kidding, at this point I would have been shocked if the deal had gone through.

warwagon said,
I'm shocked!!! :-o <----- That's my shocked face!

Just kidding, at this point I would have been shocked if the deal had gone through.

Agreed. Praise Jebus...

"mutually beneficial roaming agreement."
I dont see why all carriers dont invest in some form of agreement like this -_- surely its better for the customer...

Then again thats prob why they are not doing it...

I think it's good news, hopefully another company will buy T-Mobile and keep the competition alive! ATT was going to kill it.

Ely said,
I think it's good news, hopefully another company will buy T-Mobile and keep the competition alive! ATT was going to kill it.

Probably Sprint.... hypocrites to the end.

Ely said,
I think it's good news, hopefully another company will buy T-Mobile and keep the competition alive! ATT was going to kill it.

T-Mobile is going to get a $4 billion kill-fee from AT&T so I don't think T-Mobile is worried about selling now. 8D

BlendedFrog said,

Probably Sprint.... hypocrites to the end.

Though I don't think Sprint would do anything good with T-Mobile either, you can't really compare Sprint purchasing T-Mobile to an AT&T purchase. They're two very different animals...