Carriers

AT&T will NOT acquire T-Mobile, issues statement blaming government interference

December 19, 2011 | by Andrew Kameka

AT&T, T-Mobile

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The acquisition that wasn’t is now official – AT&T will not complete its planned acquisition of T-Mobile USA. Following continued opposition from the U.S. Department of Justice and FCC, AT&T has abandoned its purrsuit of T-Mobile and will not pursue the matter any further.

AT&T has just issued a statement to the press confirming that deal is officially over 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 statement went on to blame the FCC and DOJ for blocking this transaction and, in AT&T’s view, failing to provide options to improve service in the wireless industry.

[The wireless industry] 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.

Of course, competition is precisely why the U.S. government intervened to prevent AT&T’s $39 billion acquisition of T-Mobile. Had the deal gone through, the wireless carrier with the largest subscriber base would have acquired the fourth-largest nationwide carrier, which also happens to be among the most affordable. Sprint, the third-place U.S. carrier and frequent target of T-Mobile merger rumors, made similar arguments in its opposition to the AT&T deal.

AT&T will pay Deutsche Telekom, T-Mobile’s German parent company, $4 billion and enter into a “mutually beneficial roaming agreement” as a result of the failed acquisition. CEO Randall Stephenson states AT&T will pursue other means to improve its wireless network, and offered this advice to regulators.

“To meet the needs of our customers, we will continue to invest. 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”

- Randall Stephenson, AT&T Chairman and CEO.

via WSJ