Leaked AT&T letter seems to hurt case for T-Mobile merger

One of the big motives for AT&T to merge with T-Mobile was that AT&T needed T-Mobile's resources in order to expand its faster LTE-based network from 80 percent of the country to 97 percent. At least, that is what AT&T is telling the public and government officials. However a document that was posted and then partly redacted on the Federal Communications Commission web site this week seems to show that argument for the merger is false.

As reported by DSLReports.com the note was posted by a law firm that represents AT&T. Part of the note admits that the cost of increasing AT&T's LTE coverage from 80 percent of the country to 97 percent would be a mere $3.8 billion. However AT&T is proposing that buying out T-Mobile would take a massive $39 billion based on the reason that it needs T-Mobile to make its huge LTE expansion possible. The article speculates that AT&T is really spending a lot of money just to eliminate a market competitor rather than spending it in an effort to expand its own network.

A lot of people, including some lawmakers, have been critical of the AT&T-T-Mobile merger proposal because if it goes through AT&T and its biggest rival Verizon Wireless would control most of the wireless phone service in the US. The merger is currently under investigation by the FCC and the Department of Justice. If the merger is approved it will likely take a while to officially close, perhaps as long as a year.

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the more and more i think about this. dt should buy out at&t. lets all stop complaining and think about the future. i am not sure which other company would be a good match for t-mobile america.

T-Mobile (actually, Deutsche Telekom)is sitting pretty here. If the merger goes through, which I think will probably happen despite the protest, they get $39 billion. If the merger fails, then DT gets part of the money from AT&T. In addition, DT will still probably unload T-Mobile USA one way or another.

i have not heard of any problems with GSM recently spite the hacking situation but everyone is getting hacked. you must not be talking about america?

Nas said,
Yup. And look at those GSM-loving economies... just as bad, if not worse, than CDMA-loving economies.

Like US or Japan? yes sure.......

this is world crisis and two countries does not make up the world.

Fritzly said,

Like US or Japan? yes sure.......

locked phones are considered the ice age. people talk about freedom of movement and trade but yet people still think that being locked into a single phone is the way to go? technology evolves but yet a locked phone is just that, locked. it is called freedom of choice.

Either way T-Mobile will come out with a whole lot of monies. Now it is At&T to do or die. I feel that is should be T-Mobile buying out AT&T. I am sure most Americans would be against this but T-Mobile (150.90 mill yr 2009) has a much larger market than AT&T (97.5 mill yr 2011). T-Mobile (DETEL) provides Mobile/Wireless, TV and Land-line services. While AT&T has basically the same thing plus T-Mobile and AT&T have IPTV. T-Mobile (DETEL) provides better service compared to AT&T. AT&T serves primarily the American Market while T-Mobile serves Countries/Regions -plural. While T-Mobile America is just par. This would be a way to get outside competition from entering the American Market besides China.

Sprint on the other hand would be more costly due to all the upgrades and downgrades just to get them both working seamlessly.

People now these days consider Sim-Chip as a way to go with Mobile services. No more locking into the that same phone over and over again. With GSM if you get bored you choose to a new Mobile, take out your Sim-Chip and and put it back into your new phone. Of course you would have to stay with your carrier unless you put out for a unlocked phone thus you can choose which carrier that serves your fancy.

belto said,
People now these days consider Sim-Chip as a way to go with Mobile services. No more locking into the that same phone over and over again. With GSM if you get bored you choose to a new Mobile, take out your Sim-Chip and and put it back into your new phone. Of course you would have to stay with your carrier unless you put out for a unlocked phone thus you can choose which carrier that serves your fancy.

As opposed to CDMA, where I have to hop on the VZW for 2 minutes to switch to a different phone?

Phil D said,

As opposed to CDMA, where I have to hop on the VZW for 2 minutes to switch to a different phone?

More like this scenario for example:

it is one in the morning, my phone battery is dead, I need to make an urgent call, send a SMS, check an email etc.; I swap my SIM card to the phone of a friend of mine and do all the above.

Furthemore not everybody live in the same building where the Verizon store is.
Said that you are "free" to be locked with a provider. Ihave used cellular phones since 1990, never used a carrier crippled phone and I cannot even imagine to be slaved to Verizon.
Said that "De gustibus non disputandum est" so... enjoy your "status".......

JaykeBird said,
I already saw an AT&T commercial about them merging with T-Mobile, so obviously their confident it'll happen...
I think they're trying to sway public opinion. I've seen plenty of public outcry over the merger and I would bet there are a number of letters arriving at the FCC & DOJ objecting to the merger.

WhiteKnight1 said,
What's wrong with wanting to take out your rivals? Do forget what would we live in now? It's all about the $$$


FAIL there is a reason ma-bell was split before ... this "buyout" would lead to the same thing or not much worse

Competition is needed to keep prices low. If one company controls an entire market, that company can then raise the prices for their product, and no one's able to stop them, because there's no competition.

WhiteKnight1 said,
What's wrong with wanting to take out your rivals? Do forget what would we live in now? It's all about the $$$

Didn't you know, since it's ATT it requires instant bashing. It isn't like Verizon hasn't bought competitors or merged with others to create what it is now... right??

shockz said,

Didn't you know, since it's ATT it requires instant bashing. It isn't like Verizon hasn't bought competitors or merged with others to create what it is now... right??

There's a big difference here seeing as most companies acquire to grow and obtain sought assets to allow them to compete better. ATT is looking to acquire to wipe out a competitor. Sure they get customers and assets but it's easy to see they could build out at 10% of the cost and save billions of dollars but that would mean they would have to continue to grow by offering excellent service, good value, and good customer service. At this point in time the greater portion of the population believes none of these points apply to ATT so instead of improving their business for the betterment of their customers they choose to simply wipe out a competitor using their massive capital and strong-arm the public into fewer choices. I honestly think this merger would be bad for US customers but who knows what the FCC & DOJ are thinking.

Was only a matter of time before they slipped up. They never had a strong argument anyway.

With Sprint partnering with LightSquared for a potential LTE rollout, a merger with T-Mobile is now more viable than before. The company philosophies would mesh very well as both are committed to offering consumers good deals.

I always knew this to be true. They have the money to fix NYC and San Fransisco coverage and what did they let happen? most of those people experiencing the worst ATT coverage in America switched to Verizon with the Verizon iPhone. So it is also true they have the money to get to 97% without t-mobile, but instead its not t-mobile's money they say their after its the spectrum, which is false because its just about being more dominate.

Coolaaron88 said,
Cats out of the bag At&t

Not really. AT&T obviously wants less competition because it means more money for them. And it doesn't really matter why AT&T wants to buy them out because the fact is Deutsche Telekom doesn't want to be in the US market anymore, which was said when the original buy out reports started. I don't know why no articles ever mention this anymore.