A Failed T-Mobile Acquisition Could Cost AT&T $6B

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Disrupt NYC: The Full Agenda

There’s been a lot of talk out there about what will happen after AT&T acquires T-Mobile USA. How it will affect competition, consumers, and the industry as a whole are just some of the questions that have arisen since the deal’s March announcement. But has anyone stopped to think about what might happen if federal regulators reject the deal?

Reuters reports that AT&T will owe a whopping $6 billion, including $3 billion in cash, to T-Mobile’s parent company Deutsche Telekom, should the deal fail to receive approval. Reuters’ sources chose to remain anonymous, but did say that the $6 billion would include giving Deutsche Telekom $1 billion in a roaming agreement and $2 billion in spectrum.

A number of different people raised their concerns with the deal at Wednesday’s congressional hearing, including democratic Wisconsin Sen. Herb Kohl, who said the deal could create a “duopoly,” and Sprint CEO Dan Hesse, who said (as promised) that the deal would cause “irreparable harm to competition.”

It’ll be a while before the verdict is in, as the Justice Department and the FCC have requested further information from the carriers before making their decision. Until then, all of you T-Mobile customers have some choices to make: If the deal passes will you become part of AT&T’s potential 130 million subscribers, jump ship to Verizon, or place a wallet-shaped vote in underdog Sprint’s ballet box?

[via CNET]