AT&T Withdraws T-Mobile Merger Application From FCC
The original iPhone U.S. wireless carrier, AT&T is starting to believe that the planned merger with T-Mobile is headed for trouble. AT&T announced that it has withdrawn its joint application for FCC approval of what was going to be a $39 billion deal. Previously, the two companies had said that they were going to focus efforts on getting approval from the Justice Department for the merger. But that seems like a stretch since the Department of Justice sued AT&T last August, claiming the merger was anti-competitive and in violation of antitrust laws.
As of right now, AT&T said it has plans to book a $4 billion charge in the 4th quarter in preparation for the deal failing and also due to having to make a large payment (of up to $6 billion) to T-Mobile, which was guaranteed to the company as a break-up fee. It seems that AT&T auditors want the company to take the financial hit now and the action that AT&T announced today is a sign that the company has low confidence in convincing the FCC or the Justice Department that the deal is good for consumers.
Previous arguments that AT&T used when bringing up the merger included the creation of many new US jobs. The U.S. government claimed that the merger would result in a massive job loss and higher prices for cellular service. The FCC and the Justice Department weren’t the only opposition that AT&T and T-Mobile would have to face. Competitors were also against the merger, especially Sprint. AT&T was the first company to offer Apple’s iPhone, which has now opened up to Sprint and Verizon. Despite the popular U.S. smartphone being offered on multiple U.S. carriers, AT&T still remains the most popular wireless carrier
for the iPhone.
Does this disappoint many of you T-Mobile users? How do you feel about the possibility of no merger happening? Share any thoughts below!