The AT&T/T-Mobile Merger is Dead

Ryan Whitwam

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.

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