AT&T has officially pulled out of merger plans with T-Mobile. The deal which was worth $39 Billion was set to bring T-Mobile into the AT&T umbrella. This comes after the merge was blocked by the FCC and the DOJ because they felt it would hurt the wireless industry and consumers in the long run. AT&T will owe T-Mobile $4 Billion for the failed attempt.
I’m not surprised this deal didn’t go through once federal agencies stepped it. There wasn’t much that the two wireless companies could do to prove the merge would have positive effects on the industry or the economy. This isn’t to say that T-Mobile won’t be bought out at all, It just means that it won’t be AT&T that will do it. Check out the official press release below.
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.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.