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AT&T has abandoned its plans to take over T-Mobile due to too much opposition from the FCC and the Department of Justice, the company announced this afternoon.
AT&T sought to buy T-Mobile from its parent, Deutsche Telekom, for $39 billion, but lawsuits and vocal opposition from the U.S. government have been piling up. On top of an lawsuit issued by the DOJ in August, the FCC went on the record in late November by saying the merger would ultimately hurt U.S. consumers and the wireless market.
The main goal of the T-Mobile acquisition was for that company’s valuable wireless spectrum. Randall Stephenson, AT&T chairman and CEO, said in a statement that AT&T planned to keep heavily investing in wireless technology, but it urges Congress to address the issue of unused wireless spectrum.
“To meet the needs of our customers, we will continue to invest,” Stephenson said. “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.”
AT&T will have to pay Deutsche Telekom $4 billion because the deal fell through, but said it also plans to “enter a mutually beneficial roaming agreement with Deutsche Telekom.” In theory, that should mean AT&T and T-Mobile customers should end up better off, even though the deal was killed.
The biggest winner of a dead deal between AT&T and T-Mobile is clearly Sprint, which would have become far and away the smallest major U.S. carrier. Sprint had also sued AT&T to stop the merger. Sprint’s shares are trading up 6 percent in after-hours trading, while AT&T’s share price is nearly unchanged.
Are you glad the deal is dead?