Mobile

AT&T to acquire T-Mobile for $39B

AT&T just announced that it has reached an agreement to acquire Deutsche Telecom’s T-Mobile USA unit.

The deal is worth $39 billion, with $25 billion in cash and the rest in stock. By adding 33.7 million customers, the decision should solidify AT&T’s position as the largest carrier in the United States, a position it recently reclaimed with 95.5 million subscribers.

In the announcement, AT&T emphasizes the network benefits to the deal, saying the acquisition provides “a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to meet the ongoing explosive demand for mobile broadband.”

Indeed, some have long said that the carrier model is broken and that economies of scale are helping AT&T and Verizon grow larger, while threatening T-Mobile and Sprint’s ability to survive in the long haul. AT&T’s acquisition of T-Mobile accelerates that process and signals the first major step of consolidation. (See the piece written by VentureBeat’s Matt Marshall and Norwest’s Tim Chang two years ago about this).

AT&T’s network has plenty of critics — including from T-Mobile, as you can see in the commercial embedded at the end of this post (spotted via Omar L. Gallaga).

Sprint was previously rumored to be in talks to acquire T-Mobile, a deal that VentureBeat’s Devindra Hardawar described as the “worst idea ever.” This deal makes a bit more sense, since AT&T (unlike Sprint) uses the same GSM network technology as T-Mobile.

US regulatory agencies still have to approve the acquisition. The government may not be entirely receptive to the idea — Business Insider notes that 2010 was the first year the Federal Communications Commission did not conclude that the wireless industry was competitive, although Wireless Industry News reports that the FCC may go back to calling the industry competitive this year. AT&T tries to address regulatory concerns in its announcement, saying, “The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal.”

Forrester analyst Charles Govin said the deal has pluses and minuses:

The good news: high-speed mobile broadband service will improve in quality and coverage, including — in the long run — those in rural communities outside the reach of terrestrial broadband today. The bad news: the cost of that service won’t come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the US. While clearly troublesome for Sprint and other smaller mobile competitors, It’s also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer.

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Trackbacks

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  4. [...] a big deal, because lack of a finding does not help predict what the FCC will decide regarding the pending merger of AT&T and T-Mobile. The FCC launched an investigation of the merger along with the Department of Justice in [...]

  5. [...] to stop AT&T’s T-Mobile purchase Sprint CEO Dan Hesse has been railing loudly against AT&T’s $39 billion purchase of T-Mobile since the deal was announced. Now we have a closer look at Hesse’s concerted effort to kill [...]

  6. [...] a big deal, because lack of a finding does not help predict what the FCC will decide regarding the pending merger of ATT and T-Mobile. The FCC launched an investigation of the merger along with the Department of Justice in [...]

  7. [...] AT&T’s impending $39 billion purchase of T-Mobile on the horizon, LightSquared’s 4G network will certainly add a bit of variety to the wireless [...]

  8. [...] ATT’s impending $39 billion purchase of T-Mobile on the horizon, LightSquared’s 4G network will certainly add a bit of variety to the wireless [...]

  9. [...] While losing Radio Shack is yet another blow for T-Mobile, the addition of Verizon Wireless means that the retailer will be able to offer a wider selection of smartphones, as well as 4G LTE service, to its customers. The news could also potentially be used by AT&T to push federal regulators to approve its pending $39 billion takeover of T-Mobile. [...]

  10. [...] The news could also potentially be used by AT&T to push federal regulators to approve its pending $39 billion takeover of T-Mobile. AT&T could, for example, argue that T-Mobile’s struggling sales at Radio Shack are a [...]

  11. [...] U.S. government has apparently just filed papers to block AT&T’s proposed $39 billion purchase of T-Mobile, in what has to be the biggest obstacle yet to the deal, Bloomberg [...]

  12. [...] “By filing suit today, the Department of Justice has concluded that AT&T’s acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws,” Genachowski wrote. This marks the first time that the FCC has actively spoken against the $39 billion merger. [...]

  13. [...] U.S. government has just filed papers to block ATT’s proposed $39 billion purchase of T-Mobile, Bloomberg [...]

  14. [...] “by filing suit today, the Department of Justice has concluded that AT&T’s acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws,” Genachowski wrote. this marks the first time that the FCC has actively spoken against the $39 billion merger. [...]

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  18. [...] first announced it wanted to buy T-Mobile in March 2011. At that time, the price had been set at $39 billion. Even at that time, ATT acknowledged there would be antitrust concerns with the deal but said, [...]

  19. [...] first announced it wanted to buy T-Mobile in March 2011. At that time, the price had been set at $39 billion. Even at that time, AT&T acknowledged there would be antitrust concerns with the deal but said, [...]

  20. [...] all the people to defend AT&T’s $39 billion purchase of T-Mobile, Verizon CEO Lowell McAdam comes as one of the biggest [...]

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  23. [...] but it’s becoming increasingly evident that AT&T will have to make some concessions for the $39 billion deal. The FCC also backed the DOJ’s maneuver, which boils down to the merger being [...]

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  29. [...] and Deutsche Telekom first announced plans to sell T-Mobile USA for $39 billion in March 2011. T-Mobile, which is the fourth largest wireless carrier, has struggled to compete [...]

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  47. [...] and Deutsche Telekom first announced plans for AT&T to acquire T-Mobile USA for $39 billion in March 2011. T-Mobile, which is the fourth largest wireless carrier, has struggled to compete [...]

  48. [...] Federal Communications Commission last night released a damning 157-page report (PDF) against AT&T’s proposed $39 billion T-Mobile takeover, which concludes that the merger would ultimately hurt US consumers and the wireless [...]

  49. [...] The Federal Communications Commission last night released a damning 157-page report (PDF) against ATT’s proposed $39 billion T-Mobile takeover, which concludes that the merger would ultimately hurt US consumers and the wireless [...]

  50. [...] Contrary to previous statements, AT&T and Deutsche Telekom are working on a backup plan that would take place if U.S. regulators don’t approve the $39 million sale of T-Mobile. [...]

  51. [...] AT&T and T-Mobile discussing joint venture if merger fails Posted by Tech On dicembre – 1 – 2011 Translationvar translate_this_src = "en";Contrary to previous statements, AT&T and Deutsche Telekom are working on a backup plan that would take place if U.S. regulators don’t approve the $39 million sale of T-Mobile. [...]

  52. [...] Federal Communications Commission last night released a damning 157-page report (PDF) against AT&T’s proposed $39 billion T-Mobile takeover, which concludes that the merger would ultimately hurt US consumers and the wireless [...]

  53. [...] Contrary to previous statements, AT&T and Deutsche Telekom are working on a backup plan that would take place if U.S. regulators don’t approve the $39 million sale of T-Mobile. [...]

  54. [...] and Deutsche Telekom first announced plans for AT&T to acquire T-Mobile USA for $39 billion in March 2011. T-Mobile, which is the fourth largest wireless carrier, has struggled to compete [...]

  55. [...] certainly won’t be lacking in suitors if AT&T’s $39 billion acquisition falls through. Dish Network is interested in partnering with T-Mobile for a wireless network of its [...]

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  57. [...] sought to buy T-Mobile from its parent, Deutsche Telekom, for $39 billion, but lawsuits and vocal opposition from the U.S. [...]

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  59. [...] sought to buy T-Mobile from its parent, Deutsche Telekom, for $ 39 billion, but lawsuits and vocal opposition from the [...]

  60. [...] and sense of  self-entitlement that played a big role in the T-Mobile merger falling apart. From the beginning, AT&T acted like it was doing consumers a favor by gobbling up one of its biggest competitors [...]

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  63. [...] and sense of  self-entitlement that played a big role in the T-Mobile merger falling apart. From the beginning, AT&T acted like it was doing consumers a favor by gobbling up one of its biggest competitors [...]

  64. [...] about a year ago, when AT&T announced its intention to acquire T-Mobile for $39 billion, the FCC was the agency that needed to decide whether or not the deal would leave the wireless [...]

  65. [...] about a year ago, when AT&T announced its intention to acquire T-Mobile for $39 billion, the FCC was the agency that needed to decide whether or not the deal would leave the wireless [...]

  66. [...] about a year ago, when AT&T announced its intention to acquire T-Mobile for $39 billion, the FCC was the agency that needed to decide whether or not the deal would leave the wireless [...]

  67. ETCentric says:

    [...] MobileBeat article: “AT&T to acquire T-Mobile for $39B” [...]