We heard earlier today that AT&T and T-Mobile couldn’t find buyers for assets that could help make their merger a reality, but now there’s no need to worry about it: AT&T has just announced that the deal is officially dead.
In a recent release (reproduced in full below), AT&T lays the blame on the FCC and the U.S. Department of Justice and states that the actions of two governmental bodies “do not change the realities of the U.S. wireless industry.”
They go on to say the the merger would have been an interim solution to the spectrum allocation issue that plagues the industry, and that without the merger, “customers will be harmed and needed investment will be stifled.” Harsh words from AT&T, and ones that may not be true if the contents of an FCC staff report are to be believed.
Released shortly after AT&T and T-Mobile withdrew their merger application, the staff report called into question the claims that the merger “would serve the public interest, convenience, and necessity.” In their investigation, the FCC determined among other things that approving the merger would drastically reduce competition and investment in the wireless space, contrary to AT&T’s claims of jobs and mobile broadband for all.
As far as the FCC is concerned, today’s is a big win for consumers and a big blow to AT&T. And I mean a big blow — with the merger in ruins, AT&T must shell out $4 billion to T-Mobile USA parent company Deutsche Telekom in the form of money and spectrum access. What’s more, the death of the merger will also see AT&T and T-Mobile entering into a roaming agreement, the fruits of which we may have already started to see.
So, after all those months of legal maneuvering, the case has finally come to a close. While AT&T couldn’t close the deal, other companies are already looking to get cozy with T-Mobile: satellite television provider Dish was eyeing up smaller carrier recently, and company CEO Joseph Clayton mentioned he was open to a network partnership with the magenta-hued carrier.
AT&T Ends Bid To Add Network Capacity Through T-Mobile USA Purchase
Company Reaffirms Its Commitment to Mobile Broadband Leadership
Dallas, Texas, December 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.