AT&T Pulls Plug on Fateful T-Mobile Bid

[Michael Essany]

AT&T is dropping more than just calls today. It has also dropped its high-profile and highly-suspect $39 billion bid for T-Mobile USA.

Late Monday afternoon, the second largest U.S. mobile operator announced that it is effectively giving up its initial plan to gobble up T-Mobile as a direct result of seemingly insurmountable opposition from U.S. federal regulators.

Consequently, there's a hefty price to be paid by AT&T for the botched merger attempt. AT&T must now pay $3 billion in cash and turn over a portion of its wireless spectrum to T-Mobile owner Deutsche Telekom AG. As we understand it, this move represents AT&T meeting its contractual penalty for failing to complete the acquisition.

Aside from the cash and spectrum, Deutsche Telekom is also getting a "mutually beneficial" roaming agreement from AT&T.

Deutsche Telekom said it will return to reporting T-Mobile USA as part of its continuing operations and that its group forecast for 2011 of an expected earnings before interest, tax, depreciation and amortization (EBITDA) of around 19.1 billion euros ($24.86 billion) would remained unchanged.

Clearly, this merger was stymied long ago by the US Federal Communications Commission and the U,S, Department of Justice, as both vocal critics argued that the merger, if sanctioned, would result in a loss of market competition and even more substantial job layoffs.

Source: Reuters

[ohthatguyagain]

Greaaaaat... Even fewer new towers for us AT&T users... Awesome...

[MoDaLoT]

Boo Boo I would love to see T-Mobile with a iPhone too.

[blkcadi]

Maybe now T-Mo may get the iPhone in spite of this. One can only hope.........................

[A3gOwner]

They (t-mo) just recently started using the 1900 spectrum for 3G in the western US. This brings 3G to unlocked iPhones and unlocked phones of all sorts. Bet it has something to do with this.

Here's a link to a thread with alittle more detail on the 3G thing and source links.

3G on t-Mo USA now available to some iPhone users.

[blkcadi]

They (t-mo) just recently started using the 1900 spectrum for 3G in the western US. This brings 3G to unlocked iPhones and unlocked phones of all sorts. Bet it has something to do with this.

Here's a link to a thread with alittle more detail on the 3G thing and source links.

Really, I live on the left coast and besides not hearing about this (which is no surprise) but do not get 3g speed. Is this something that is or will be happening? Source?

[A3gOwner]

Yeah sorry forgot the link.

[RICO_]

Keep a close eye on your bill folks. Make sure AT&T doesn't try to pull a sneaky fast one on customers to recoup some of this hefty loss.

$3 billion out the window for nothing. That's a lot of wasted cheddar.

[nityanandachandra]

Yay cheaper gsm survives

[ikesmasher]

YES!
Although, tmobile could have used the extra towers.... :P but i would rather not have anything to do with ATT.

[JedixJarf]

Best news I've heard all day.

[csglinux]

This is great news for any customers on AT&T or T-Mobile :-)

[chasev2]

I think Deutsche Telekom is likely to sell T-Mobile to Sprint or one of the smaller wireless competitors in the United States now. Deutsche Telekom wants out of the US wireless market. I don't think this failed merger will change their position. They'll just sell for less now.

[ipodtouchman77]

Yes.

[Cer0]

And now that 3 billion will go to the parent company and T-Mobile will be up for auction in about a year or so. So T-Mobile lives for another year for now.

[Cokeman]

AT&T will now actively fight if Sprint or Verizon try to buy it. T-Mobile will end up being sold off in pieces. I don't see this as good news.

[JacquesChirac]

woooohooooo finally a case where the average person wins and the system works!

For those who don't see how this is fantastic news, do some research and it'll be very apparent.

[duromega]

I'm glad :@

[Cer0]

woooohooooo finally a case where the average person wins and the system works!

For those who don't see how this is fantastic news, do some research and it'll be very apparent.

Wasn't really the average person that won. It was other coprorations doing everything they could to stop the buyout. Including the one company that was planning on buying T-Mobile before ATT dropped the cash bundle ahead of them.