The AT&T/T-Mobile Merger is Dead
Print
It’s been a long hard climb up the mountain for AT&T as it sought regulatory approval for its $39 billion purchase of T-Mobile USA. Well, it looks like AT&T will never see that mountaintop. The carrier has announced via press release that it is walking away from the deal in search of greener spectrum pastures. Though, Ma Bell did offer a parting swipe at the regulators that essentially killed the deal.
“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’s statement read. AT&T’s 4G spectrum licenses are not as extensive as its nearest competitor, Verizon.
As a result of killing the merger, AT&T has to pay T-Mobile a whopping $4 billion in cash and other assets. Considering the massive disruption in its business, that might not be enough to really compensate T-Mobile, but we’re sure they will be happy to take it. To consider giving away all that cash, AT&T must have seen little hope after the thrashing it got from the FCC. The commission released a scathing report after AT&T withdrew its original merger request, and the DOJ was no fan of AT&T either.
The most likely course of action now could be a spectrum sharing deal between the carriers. T-Mobile holds some 1900MHz licenses that are compatible with AT&T devices, and AT&T could reciprocate with some LTE data. Only time will tell if little T-Mobile tries to find another suitor.
More like this
40
Comments
Comments are closed on this article
win7fanboi
December 20, 2011 at 8:28am
We will know for sure if they have actually backed off in 5-10 years. In all probability they might be working on bribing the officials and have more lobbyist in place before trying again. All eyes are still on you AT&T.
someone87
December 20, 2011 at 7:50am
Let’s all celebrate as a little bit more of this country’s economic freedom is taken away from us, by the big, all knowing, all wise, government.
riopato
December 21, 2011 at 11:39pm
Government didn't stop anything at&t bailed on the merger. Most mergers take a very long time to succeed. At&t had up to the middle of next year to finalize this deal. Government was only asking questions that at&t couldn't answer but that didn't mean it prevented them from the merger. FCC was only following their own federal guidelines (e.g. laws)that at&t (as well as any other business) needed to comply with and the DOJ had yet to hear at&t's case.
As you already pointed out, multiple companies have been doing this for years. Why do you think at&t couldn't? I am more concerned about at&t's sincerity towards this merger considering that they are willing to just throw away billions of dollars because they couldn't answer some questions the FCC and the People had to ask.
tekknyne
December 20, 2011 at 10:08am
You probably subscribe to the "free market will just work itself out" theory too?
someone87
December 20, 2011 at 2:03pm
Yep.
If people hate them, they will go to a diff company.... Like Sprint or Verizon....
win7fanboi
December 20, 2011 at 2:10pm
not if he can't get cell coverage from a 'diff' company... dum dum. Sprint/Verizon are both CDMA. T-Mobile is the next largest GSM provider after AT&T. I know... it's very complicated.
someone87
December 20, 2011 at 2:18pm
The same can be said for hundreds of other industires.
Change phones, change cariers, change where you live, it's not the governments job to make sure you always have 4 options for everything in life.
Now I have always said the government needs to be involved if contracts are breached, or customers are lied to. If you have a contract with T-Mobile, and they get bought out by AT&T, they are required by law to maintain the T-Mobile's agreement they had with you. If that's breached, sue the daylights out of them.
The constitution doens't provide the feds with the power to regulate private business like that. I would like to see them get back to their actual job, everything spelled out in the constitution, nothing less, nothing more.
That's what I am really saying....
riopato
December 21, 2011 at 11:50pm
So you would prefer another antitrust trial on tax payers dime similar to what happened with Ma bell and Microsoft. I suppose that whole fanny may fiasco was all due to government regulations too!
win7fanboi
December 20, 2011 at 2:36pm
I am all for putting the fed power mongering to a stop. I think Federal Reserve, FBI, TSA, <insert names of any other govt agency that is over reaching here> have too much control. Everything from snooping calls, x-ray scanners at the airports, SOPA, etc is all very detrimental to the constitution. However making corporations so big that people aren't left with choice is never good.
In some areas where you can't get a gas hookup in your house you only have the one electric company. If they wanted to double your prices, what could you do? No one would buy houses in that area/subdivision so you are stuck with a house where your electric bill is same as half your mortgage.
someone87
December 21, 2011 at 6:17am
So you agree with following the constitution when you want, and want the feds to have un-constitutional power when you think it helps you.
The simple answer to your gas hookup question is don’t move there. Live somewhere else. Just like all the other choices we have in life, if you like high taxes, move to CA, if you want low taxes, move to TX, if you like snow, move north, if you like the beach, move south, east or west.
It's not the government’s job to make sure you have more than 1 option. As much as it may suck at times, history proves when a business screws its customers over, it fails. If someone charged a billion dollars for gas, people would buy electric only stuff and they would go bankrupt.
riopato
December 22, 2011 at 12:08am
FCC's issues with at&t's merger wasn't about consumers having more than 1 option to choose a service but more about at&t's ability to be able to regulate their own company as the only provider of their type of service while being a company that can continue to be as competitive as they are now. Without any competitor in the GSM market, how will at&t continue as a competing business when there will be nothing to compete with? A valid concern is will government end up having to do what you are complaining about? Regulate the wireless telcos.
firefox91
December 20, 2011 at 8:25am
Ahh yes, because the corporate greed that would ensue after this merger would be much better. Seriously, ATT already has the worst customer satisfaction. Making them bigger and taking a competitor off the market at the same time only serves to have them continue their ways and drive up prices. This merger was bad for everyone.
someone87
December 20, 2011 at 2:10pm
Corporate greed BS. It's called expanding market share, and doing what's best for business.
This merger was good for lots of people, especially AT&T customers.... And T-Mobile customers so far as I could tell....
True it would take one more player out of the market, but it's far from a monopoly, (if there ever was such a thing as the libs like to claim).
Weather or not you like it, the point is the government got involved (which they should not be) and prevented a business from buying another business. People like to think it's a big deal because of the size, but that doesn't mean it's OK for the government to extend their power beyond what the constitution allows, just "because".
Were you up in arms when AMD bought ATI? Or the 30 compaines Google buys every year? It's called buisness, it happens, calm down, and let business men do what they do best.
win7fanboi
December 20, 2011 at 2:17pm
mistake # 1 - Using bold font
mistake # 2 - Talking out of your ass about issues you have no clue about. (AMD was never competing with ATI. One made cpus and other gpus.) Creating synergy is not same as eliminating competition.
mistake # 3 - Your last sentence - it's businessmen not business men. Learn how to talk before you start yelling.
p.s : I am an at&t customer and I am glad this merger failed.
someone87
December 20, 2011 at 2:20pm
Sorry about the bold, when I copied it from Google docs, it went bold, I don't know how to un-bold.
Many thought AMD buying ATI was considered a monopily, it was just an exmaple.
Yes, I suck at spelling, always have, always will.
Too bad, from what I have read, the AT&T network would have gotten much better, more coverage, etc.
riopato
December 22, 2011 at 12:22am
At&t said better service and coverage when they merged with Cingular. Remember all the "fewer dropped calls" ads that came out after that? They have yet to fulfill that promise. Just ask any iPhone user about those improvements.
win7fanboi
December 20, 2011 at 2:34pm
AFAIK, At&t owns the cell towers that T-mobile leases. Right now you can swap out the SIM cards in the cell phones that you might have accumulated with At&t and sign up with T-mobile without having to buy new phones. If the merger had gone through, consumers wouldn't have that option.
someone87
December 21, 2011 at 6:24am
You’re very right.
When Seagate bought Samsung's hard drive company we have less choices.
When Western Digital bought Hitachi's hard drive company we have less choices.
When Google buys 30 companies a year, we have fewer choices.
Less choices isn't always bad, or good. A proper free market, without government intervention, rises and falls. Business buy other business, and if they are smart business men, it's a good thing. If they are bad business men, or screw the customer, they often fail.
It seems like 90% of the people against the AT&T buyout is because they hate AT&T as a company, but they are not trying to do anything a dozen other big tech companies are doing, yet nobody hates on them.
Again, simply stated, it's un-constitutional, thus the government shouldn't be involved.
PS, I am on a comptuer with MS Word, so hopefully my spelling is better, and everything isn't bold.
riopato
December 22, 2011 at 12:45am
Seagate also bought Maxtor. I can still buy a Maxtor drive. if at&t buys tmobile, will my tmobile phone still work on at&t 3g let alone their 4g?
win7fanboi
December 20, 2011 at 8:25am
They haven't taken any freedom away. On the contrary, by keeping huge corporations from eliminating competition by buying them outright in effect gives consumers more freedom to choose their service providers.
someone87
December 20, 2011 at 2:12pm
So if your ever a sucsessful business person (man/women), and wish to buy a smaller company to expand you're own. Then the governemnt comes along and (un-constitutionally) says no, lets see what you have to say then, about freedom being taken away.
You didn't have the freedom to buy something on the open market, how is that a good thing?
riopato
December 22, 2011 at 1:07am
Your analogy is flawed. t Mobile isn't a small company. Infact it's a nation wide company that's buying out a nation wide company thats part of a global company in order to be a competing nation wide company against a different nation wide company. At&t wants consumers to believe that they are buying a company like metropcs which is a regional company.
T-mobile has had their share of mergers themselves yet no one complained about them. Why do you think this is the case?
win7fanboi
December 20, 2011 at 2:22pm
A billionaire may be able to afford buying all the available organs on a organ donor's market. But he/she can't do that according to the law. According to you they should be able to buy the life saving organs and dump them in a landfill just 'cause they can afford to.
Another example, I have money that some poor woman needs to keep herself from going bankrupt. I can't pay her in return for her "services". It might save her from losing her house but people are not allowed to buy what they want for a reason.
someone87
December 20, 2011 at 2:28pm
As with anything there are super extreem examples that sound super bad. The liklyhood of that happeneing at all, much less often enough to cause major issues, is minimal. For what it's worth, the governemnt (though their regulations) kills hundreds of people each year already..... I talk to good friends in the medical feild who have countless stories of how they are powerless to help because the government said not to.
Anyway, the simple point is, the constitution doens't grant the feds that power. Weather or not we agree with that, and wish to see more or less governemnt regulation inside private business, the fact is they shouldn't be doing it, at all, right now.
If "WE" the people got together, and said;
"Yes, we think the governemnt can do a better job than the free market, and "WE" would like you to tell us how to run our lives"
And the constitution was amended to reflect that, so be it.Right now, they don't rightfully have the power, and thus they shouldn't.
It seems simple to me.
Inglburt
December 19, 2011 at 8:02pm
I must say that I am interested in the talks about Dish partnering with T-mobile tho.
I am a T-mobile customer...
riopato
December 22, 2011 at 1:18am
If a Telco company can be a cable provider, then why can't a cable provider be a Telco? Dish network would be very interesting indeed!
But tmobile has been a huge android supporter and I can't help but think that google would be a perfect company to snatch up this company and become the first wireless IPvoice Telco. Internet based cellular company sounds nice to me.
JCGPZ9
December 19, 2011 at 7:15pm
Don't celebrate just yet. I'm suspicious of what may happen from here on out.
Holly Golightly
December 19, 2011 at 9:27pm
You are right... It is a bit too early to know for sure. They can easily turn this around and go through an insane bribe. I hope this is not the case because we need the jobs with the way this economy is going. What AT&T needs to do is just create their own network, instead of buying out the other networks. One day in the future, the cellphone industry will die. Big corporations like Verizon and AT&T will be no more. Makes me think of MCI and VoiceStream.
Carpnter
December 19, 2011 at 4:36pm
People forget that Verizon was once one of those Baby Bells that was broken up. They let Verizon continue to gobble up spectrum and pretty soon Verizon will become the company that everyone thinks AT&T is.
Biceps
December 19, 2011 at 5:50pm
Dude, all of the US phone companies were once one of those Baby Bells. I congratulate any effort to keep them from re-conglomerating. I'm not disagreeing with you re: Verizon, just pointing out that your comment is not necessarily painting the entire picture.
blkpanthr
December 19, 2011 at 8:59pm
Actually, Sprint was not.
It was the Southern Pacific Railraod Infrastucture division..
wintercoder
December 19, 2011 at 3:52pm
Being dead-locked in a rural town where Verizon is the only option... I say that the FCC should force an immediate break up of Verizon so that no one portion is any larger than AT&T.
Through Verizon's under the table dealings with local county boards (speculation based on observation) it is my opinion that Verizon is the true elephant dancing around in a cute/cuddly kitty costume.
When a carrier the size of Verizon demeans and attempts to stifle true innovation (Windows Phone), they are closing in on monopolistic tendancies.
If more competition with a greater number of players is what you truely want, breaking up Verizon is the logical choice.
Sovereign
December 20, 2011 at 7:37am
I think Comcast did the same thing (dealings with county boards/towns). The town I live in now was deliberately bypassed by Verizon FiOS because of an exclusivity deal with Comcast.
Biceps
December 19, 2011 at 5:53pm
Yeah, as much as I want to cheer and wave my hands over this victory, the cynic in me is telling me the AT&T probably just didn't bribe the right people this time around. Should have sent Obama and the FCC people some checks and promised people in the FCC some nice revolving-door jobs... they probably would have gotten their merger.
Connect with MaximumPC
Featured Content
The gang discusses the GTX 690, Trinity, Ivy Bridge, Amazon, big-box stores, MMOs,...
This month's issue
Feature
Build a PC On Any Budget
Feature
Cloud Services Showdown
How-To
Encrypt Your External Drive
Build It
Upgrade an X58 Rig
Most Commented Articles
Latest Max PC Tweets
- maximumpc: Original RickRoll Video Returns to YouTube After 24-Hour Copyright Hiatus http://t.co/MaH9Sxyy19 hours 1 min ago
- maximumpc: Corsair has decided not to go forward with its $78 million IPO, citing weak equity market conditions http://t.co/A5a4DAzj19 hours 10 min ago
- maximumpc: Want to work at Maximum PC? Our Online Managing Editor, Alex, is moving away, so we need a new one. http://t.co/9Z7JCh0E2 days 16 hours ago
