AT&T to acquire T-Mobile USA for $39 billion [Update]

AT&T has entered in a definitive cash-and-stock agreement with Deutsche Telekom to acquire T-Mobile USA that will make AT&T the largest wireless provider in the United States. The company announced today that the board of directors from both companies have approved the acquisition which is worth a whopping $39 billion and will grant Deutsche Telekom an 8% equity stake and ownership interest in AT&T. It will also allow for a Deutsche Telekom representative to join AT&T's board of directors.

In a statement, AT&T was strong on emphasizing the importance the acquisition has on the expansion of 4G LTE. Randall Stephenson, CEO of AT&T, said that the partnership would help "improve network quality" and will assist in bringing "advanced LTE capabilities to more than 294 mllion people." René Obermann, CEO of Deutsche Telekom, underscored the importance of 4G as well and stated that after looking over several creative strategies for T-Mobile USA, AT&T is "the best partner for [their] customers." The partnership would also allow AT&T to invest over $8 billion in the United States over the next seven years in infrastructure that will benefit rural communities and small towns.

Both companies also stressed that all customers will see an improvement in service as the partnership is a definitive solution for the "impending spectrum exhaust" that mobile providers are facing.

The deal would have AT&T pay Deutsche Telekom a cash payment of at least $25 billion, which could easily fluctuate to more than $29 billion as long as Deutsche Telekom receives at least 5% equity, and is expected to close in the next 12 months with approval from regulators.

No comments were made about how the acquisition will affect customers financially if at all, but the companies did hint that the market will remain competitive.

Update: T-Mobile has posted an update on their website about what the merger means for its customers. The company says T-Mobile USA will continue to operate as an independent company until the acquisition is complete (expected in approximately 12 months). It reiterates that both companies working together can provide 95% of the United States with 4G LTE, which would be near impossible for each company respectively. T-Mobile says they will "honor all contracted plans that are entered into before the change of ownership."

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I actually like T-mob for I could have cheap internet whenever I was in the US, unilimited access for $1/day on pay as you go has been perfect for me for mail and occasional browsing. Somehow I expect ATT to axe this one..

oh please no, I have been with T-Mobile for 10 years now and never had any issues with service or customer support. AT&T on the other hand I hear constant complaints. The larger the company the worse the customer service in my opinion.

"advanced LTE capabilities to more than 294 mllion people."

The merger might not happen and I hope the price doesn't go up and merger would not have issue with service i think it would improve instead.

DAMN ... That stinks ... I'm a T-Mobile customer and AT&T blows ...
As soon as the deal gets approved I'm going to drop them and select
some else.

Maybe I might just do something strange and new ... like NO PHONE ...
If I want to talk to my friends, I'll go see them. I'll be more hands on
and in person, instead of texting or calling them. I still have a landline
So, maybe having no phone is the best thing for now.

GenBlood said,
DAMN ... That stinks ... I'm a T-Mobile customer and AT&T blows ...
As soon as the deal gets approved I'm going to drop them and select
some else.

Maybe I might just do something strange and new ... like NO PHONE ...
If I want to talk to my friends, I'll go see them. I'll be more hands on
and in person, instead of texting or calling them. I still have a landline
So, maybe having no phone is the best thing for now.

According to the T-Mobile site the two companies are still remaining "separate" and T-Mobile will still honor prices from the previous contracts. You'll probably end up benefiting in the end with the range of what used to be two separate networks now available as one.

I originally had AT&T wireless and switched to Cingular after HORRIBLE customer service. I was mortified when AT&T 'merged' with Cingular. No surprise here, AT&T gave their Cingular customers HORRIBLE customer service. After trying to upgrade to a new phone AT&T refused to remove a $5 charge which was obviously their doing, instead of: 1) keeping an existing customer, and 2) signing them to a new 2 year contract. Instead I canceled and signed up with T-Mobile for 2 years.

Best thing I've ever done. Since that time they've set honorable prices, hired friendly staff, and gave me a great no limit voice, data and sms for $80/month.

Still, T-Mobile was slow rolling out 3G so I signed up for AT&T (thinking it was water under the bridge). They ended up charging me DOUBLE what I opted in for, but offered no apologies and allowed me to quit.

I filed a Better Business Bureau report on them claiming bait & switch, and a nice AT&T rep was determined to work with me (read: remove that negative BBB score). Ultimately, it was just too much for me and I opted to stay with T-Mobile.

I will burn in hell before I give AT&T any more of my time. Verizon here I come.

Cingular bought AT&T Wireless, then a few years later merged with AT&T's landwire outfits and other various baby Bells and changed it's name to AT&T because it had better brand recognition than the Cingular name. AT&T is just Cingular under a new name. The old AT&T is dead.

Booo!
I'd rather have T-Mobile USA stay a German company.

I also fear loss of benefits when roaming in the US with my Deutsche Telekom contract on my iPhone.

GS:win

Just a quick question, what is the difference when Verizon bought Alltel a couple of years back creating the largest US cellphone company? What's the difference between this and AT&T taking over T-Mobile?

Didn't they spend millions years ago breaking up the bell monopoly?That needs to be done to the cable company's,people always lose jobs in mergers,but they are already spending millions in lobbying for this to happen.People will lose in this w/higher fees and less competition,but they will make billions more in the end;and isn't that's whats it all about.

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