AT&T abandons bid for T-Mobile USA

News Wireless United States 20 DEC 2011
AT&T abandons bid for T-Mobile USA
AT&T has abandoned its proposed takeover of T-Mobile USA. Following opposition from the US Department of Justice and FCC to the deal to create the country's largest mobile operator, the company has decided to withdraw from the takeover worth USD 39 billion. AT&T underlined the continuing need for spectrum to support expansion in the industry and called for the FCC to approve its proposed takeover of frequency licences from Qualcomm. AT&T will take a charge of USD 4 billion in the fourth quarter to reflect the break-up fees owed Deutsche Telekom. This includes USD 3 billion cash to the German operator before year-end as well as a large package of spectrum for T-Mobile. In addition the two will enter into a 3G roaming agreement for seven years. T-Mobile said the spectrum in 128 markets and roaming agreement will help expand its footprint to 280 million people, from the current 230 million. 

AT&T first announced the T-Mobile takeover in March, but the proposed deal quickly drew opposition. Some politicians and notably the union CWA supported the merger, but rival operators such as Sprint and consumer groups filed lawsuits to block the takeover, saying it would not be in the public or industry's interest. In August, the FTC, the main competition regulator in the US, filed a lawsuit to oppose the deal, saying it would have a negative impact on competition. In November the FCC signaled its intention to conduct a full administrative hearing on the merger, prompting AT&T to withdraw its application for clearance at the communications regulator. While AT&T attempted to broker a settlement by divesting some of T-Mobile's activities, it proved unable to strike an acceptable deal to sell some of its assets to smaller operators.  

Categories:

Mobile

Companies:

FCC,  T-Mobile USA,  Deutsche Telekom

Countries:

United States

Tags:

Regulations, Wireless, Wholesale, M&A buyouts & divestments

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