AT&T calls off T-Mobile acquisition bid

The carrier merger of the decade won’t happening after all. After getting blackballed by the FCC and the U.S. Department of Justice, AT&T’s planned acquisition of T-Mobile USA has officially been cancelled. AT&T broke the news in an announcement earlier today:

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.

Although they won’t merge, the two companies nevertheless plan to enter a "mutually beneficial roaming agreement." No specifics have been disclosed yet.

The failed buyout bid won’t just hurt AT&T’s future prospects. It sounds like the company’s bottom line will suffer in the shorter term, too. Today’s announcement goes on to note, "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."

Comments closed
    • albundy
    • 8 years ago

    who would be dumb enough to allow a monopolistic company to do this in the first place? seriously, did ATT forget what they have done to Americans in the past?

    • Zyphos
    • 8 years ago

    While it’s nice that this was stopped. [url=http://www.youtube.com/watch?v=TQnSEA8vsR4<]What about the rest that were allowed?[/url<] Thankfully most other countries don't have to worry about most of the crap we endure because they went from no phone to cell phone. It's amazing what not having to worry about laws, regulations and other shenanigans a centuries old build out brings to the table.

    • ShadowEyez
    • 8 years ago

    I’m just glad the FCC and DoJ basically forced AT&T out of this.

    Anyone with a brain could see this deal sucked for everyone but AT&T (and maybe a few shareholders) and that consumers, others in the industry, and market prices would all suffer as a result. The fact that AT&T promoted it as a good thing for everyone goes to show they don’t care what lies they spin or who they hurt as long as it gets them what they want.

    We can only hope the next time other megacorps try a merger that would screw everyone else over, they think back on this failed attempt and think of ways to make what they’re trying to do actually beneficial for everyone. And if you’re a .gov agency and your analysis shows it would not work out well, the fines should HUGE – think eleven figures. That may help ensure that only the best of these huge mergers move forward.

    • maxxcool
    • 8 years ago

    I find it a little heart warming that every gerbil posting is rejoicing this despite the varied dichotomous nature of our herd…

    • kamikaziechameleon
    • 8 years ago

    I was afraid my t-mobile network would decline with AT&Ts rather horrid management.

    • just brew it!
    • 8 years ago

    This is but a small victory late in a war which has been mostly lost. AT&T has already managed to re-assimilate most of the pieces of itself that were created by the 1980s anti-trust breakup; blocking the T-Mobile acquisition is very much a “closing the barn door after the horses have already left” sort of scenario.

    AT&T’s corporate logo should’ve been the Borg cube instead of the Death Star.

    SNL summed it up best back in a 1976 skit:
    [quote<]You see, this phone system consists of a multibillion-dollar matrix of space age technology that is so sophisticated even we can't handle it. But that's your problem, isn't it? So, the next time you complain about your phone service, why don't you try using two Dixie cups with a string? We don't care. We don't have to. We're the Phone Company.[/quote<] Those days are back...

      • Geistbar
      • 8 years ago

      Yeah, but before things can get better they need to stop getting worse- we’re far better off with this merger failing than it succeeding. Now we can hope that maybe things will start to turn around more. I’m not expecting something as big as AT&T being broken up again, but we might get other little victories.

        • just brew it!
        • 8 years ago

        Yeah, I’m certainly not arguing that this should’ve been allowed to go through. Just that it is probably too little, too late.

        Similar things are happening on the broadband ISP side — pretty soon the only choices for most people will be AT&T or Comcast. I’m still hanging on to my old Speakeasy (now part of Megapath) DSL service, but I’m basically stuck back in 2003 speed-wise and their reliability took a significant nosedive after Megapath bought them out so it is probably only a matter of time before I need to hold my nose and sign up with Comcast.

      • kamikaziechameleon
      • 8 years ago

      yeah if you travel at all you know that Americans have the worst mobile phone options in the world. :^/

    • odizzido
    • 8 years ago

    Black balled? Is that when blue balling gets really bad?

      • Krogoth
      • 8 years ago

      Black balls = Necrosis

      It usually happens in real-world in the late-stages of testicular and penile cancer. The only option is amputation/castration.

        • ludi
        • 8 years ago

        Uh, thanks for THAT image, but no. It refers back to an old form of voting for new members in an exclusive club or society, in which getting “black balled” means you’ve received the ultimate vote of no-confidence.

        [url<]http://en.wikipedia.org/wiki/Blackballing[/url<]

    • HisDivineOrder
    • 8 years ago

    Nothing but good news. Too bad they didn’t do all this when Comcast/Universal was busy co-opting content and distribution under one umbrella.

    Of course, it’s likely the reason that this didn’t go through and that did is that AT&T wasn’t willing to offer up checks PLUS cushy jobs for all those who would go along with it. Alas, AT&T didn’t want to have to hire even MORE lobbyists. Kinda surprised, really.

      • kc77
      • 8 years ago

      Pretty much… and one word is responsible…. Verizon. If you haven’t noticed Verizon has been collecting spectrum and buying out companies at an alarming rate.

    • destroy.all.monsters
    • 8 years ago

    Nothing but good news here. Glad it’s over with.

    The fact that ATT still even has a presence in the cell phone arena shows just how screwed up the whole telecom industry is. The worst customer service ever. Ever changing “contracts” always to the detriment of subscribers, locking into binding arbitration and on and on. Not that the whole industry isn’t doing it – they’re merely the most egregious example of such.

    What will be interesting to see is what Deutsche Telekom does now – and if they decide to sell off their bandwidth (which would be pretty stupid but might be part of any dealings with ATT).

    • Forge
    • 8 years ago

    AT&T Inc. (NYSE: T) said today that after a thorough review of [the likely trouble DOJ was going to drop on it’s monopolistic ambitions], 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 [are in the best interests of consumers, yet] do not change the realities of [AT&T’s unending desire, nay, NEED to screw over and drain money from the] U.S. wireless industry. It is one of the most fiercely competitive industries in the world [except for all the others], [and AT&T has] a mounting need for more spectrum that has not diminished and must be addressed immediately [Guess planning ahead isn’t worth it]. The AT&T and T-Mobile USA combination would have [suffered and bled money, while dumping T-Mo customers as fast as their contracts ended]. In the absence of such steps, customers will be harmed [thoroughly due to their lack of vision and support] and needed investment will be [ripped from the customer’s bleeding hands, no matter what].

      • destroy.all.monsters
      • 8 years ago

      Precisely this.

      • OneArmedScissor
      • 8 years ago

      [quote<]It is one of the most fiercely competitive industries in the world [except for all the others][/quote<] Nice.

    • StuG
    • 8 years ago

    I was told by a co-worker that the parent company of DirectTV was a potential buyer now?

    • canmnanone
    • 8 years ago

    what would happen if Deutsche Telekom abandoned or closed all the t-mo wireless in the USA, to retaliate the government for their coercive prohibition of the merger?

      • Taddeusz
      • 8 years ago

      Since they get $4 billion for the failure of the merger I doubt such a catastrophic outcome will occur.

      • Kurotetsu
      • 8 years ago

      This is an equivalent level of absurdity to speculation that Intel or Microsoft would close up shop in the EU when the anti-trust suits were all the rage.

      Anyone moronic enough to willfully lock out such an enormous market doesn’t deserve to run a company (and they wouldn’t, as the shareholders would likely have him/her dragged off to a mental institution or arrested for criminal stupidity).

      • jdaven
      • 8 years ago

      You can also say that all American and European companies should retaliate against China for being a communist country, pay low wages and have safety standards that make the industrial revolution look like Disney World, but guess what, that’s not happening either.

      It’s a libertarian, conservative fantasy that companies will “retaliate” against governments they deem anti-capitalistic. At the end of the day, large corporations make so much money no matter what the world’s governments do (TARP, tax exemptions, lobbyists, etc.).

      • just brew it!
      • 8 years ago

      Why would they do that? Even with the merger cancelled, this has worked out spectacularly well for them — AT&T now must pay them $4 billion as a penalty for failing to close the deal. Maybe in a couple of years they can fail to sell themselves to Verizon, and get paid another $4 billion for doing nothing.

      • ludi
      • 8 years ago

      Then DT would be walking away from about $40 billion of capital assets and brand value, and $20 billion of annual revenue. Why they would do that, rather than look for a different buyer, is a question that presumably only you could answer, but the next likely result is that the abandoned assets would probably be semi-nationalized and placed into some sort of special receivership, similar to the General Motors bankruptcy, then sold off to Sprint under special terms and government guarantees in order to bring the network back into service without further enlarging Verizon or AT&T.

    • Vivaldi
    • 8 years ago

    Redacted!

    Thanks for responding, I understand I was looking at the deductible from the wrong angle. What do they say about hindsight? Cheers.

      • shank15217
      • 8 years ago

      That makes no sense at all.. AT&T is going to lose $2 billion after tax write off instead of potentially paying all of their taxes. Deuch Telecom will have to pay taxes on the 4 billion it earned from AT&T. Nowhere here do I see the American tax payer losing any money.

    • ludi
    • 8 years ago

    Although I was not looking forward to being Borged back into AT&T after having left them for a much better rate plan on T-Mobile, T-Mobile USA has not been doing too spectacular the past couple years and DT has been pretty tentative about what to do with them.

    So, even though AT&T just got chased off by the cops, this may not be a question of [i<]if[/i<] T-Mo customers will get jacked, only [i<]when[/i<] and [i<]how[/i<].

      • shank15217
      • 8 years ago

      tmobile may not have the fastest data network but its good enough for a very large number of people. Their phones are decent, their plans are relatively fair and they have some neat features like wi-fi calling which saves my ass every day. I pay $92 for unlimited data, calling and 400 text messages a month and its wonderful worry free service.. Even with bad reception at home, I can use wi-fi calling to seamlessly use my rock stable cable network. I’ve been with tmobile for nearly 8 years now and their customer service is still top notch, they know they are an under dog and they try their best to keep their customers. I was dreading moving to AT&T, they would have cancelled my plan and forced me to used their capped crappy data plans and capped minutes.

        • wierdo
        • 8 years ago

        The sad part of this is that you’re supposedly getting a good deal at $92 a month for that, ouch, might be good relatively speaking, but what a crappy plan by developed world standards.

          • khands
          • 8 years ago

          It’s got to be several lines, their everything unlimited comes to like 65 after tax for just one line. But yeah, for the most part we get screwed over here when it comes to telecom.

      • Geistbar
      • 8 years ago

      While this is definitely true, I believe the conditions for cancelling the merger have AT&T giving T-Mobile ~$4 billion in cash and spectrum. It probably won’t be enough to make DT change their mind on the whole thing, it should make them less likely to just give up on it. If T-Mobile is going to be acquired, it needs to be by someone who isn’t AT&T or Verizon. Among the telecoms, that’d only leave Sprint, but they use a different communication method, so it’d be a poor match between them.

      That’d make the best option a non-cellular telecom (e.g. Comcast [ugh], or similar) or a tech giant like Google trying to make a personal promoter of their phone platform- though I consider the latter very unlikely.

        • cygnus1
        • 8 years ago

        I think Sprint could easily manage the different tech issue. They did it with Nextel just fine. Besides, since both Sprint and T-Mobile need to move to LTE anyway, they could pretty much merge their networks within only a couple or three years.

          • Geistbar
          • 8 years ago

          Wikipedia indicates that Sprint is still running the iDE network from Nextel. Their current network is CDMA. I can’t see them being happy running both of those and GSM simultaneously. I also doubt that the LTE switchover would be quick enough to help with that.

          Certainly, Sprint isn’t an impossible merger option, but the logistics of such aren’t something that I would say they could “easily manage”. Beyond that, I don’t think Sprint could easily muster up the ~$30-40 billion required to make such a deal.

      • burntham77
      • 8 years ago

      I think T-Mobile has the best rates out there and it would be a shame to lose that.

    • Vulk
    • 8 years ago

    Thank goodness. It would have been a dark day if one of the big high price, anti-competitive players gobbled up their only direct (based on technology) low cost competitor.

      • shank15217
      • 8 years ago

      Agreed, this had duopoly written all over it.. The fact that AT&T didn’t fight it shows you how bad this merger was to begin with.

    • ew
    • 8 years ago

    Yeah! My pre-paid phones are safe for now.

      • StarBlight
      • 8 years ago

      T-Mobile girl is also safe for now!

Pin It on Pinterest

Share This