Update: AT&T kills $39B T-Mobile deal
AT&T will pay a $4 billion breakup fee to T-Mobile's parent company
IDG News Service - AT&T has scrapped its plans to purchase rival mobile carrier T-Mobile USA in the face of opposition from two U.S. agencies.
AT&T said Monday it has agreed to end its bid to acquire T-Mobile USA from parent company Deutsche Telekom for $39 billion. AT&T will "continue to invest" in its own services, Randall Stephenson, AT&T chairman and CEO, said in a statement.
Stephenson called on the U.S. Federal Communications Commission and Congress to move quickly to deal with looming spectrum shortages in the mobile industry. The FCC should "expeditiously" approve AT&T's deal to buy 700MHz spectrum from Qualcomm for $1.9 billion, and lawmakers should move ahead on plans to make new spectrum available for mobile broadband, he said.
AT&T had argued that the T-Mobile spectrum would help it handle skyrocketing demands for mobile broadband services.
"The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces," Stephenson said in the statement.
AT&T will pay a $4 billion breakup fee to Deutsche Telekom, with the charge added to the company's fourth-quarter financial results. AT&T will also enter into a roaming agreement with the German carrier, the company said in a press release.
Both the FCC and the U.S. Department of Justice had opposed the deal. The DOJ filed an antitrust lawsuit to block it in August, and the FCC announced in November that its staff had found the acquisition to be contrary to the public interest.
Public Knowledge, a digital rights group that led the charge against the deal, applauded AT&T's decision.
"In this age of cynicism, it is important for the American people to see that Washington does not always go to the highest bidder," said Harold Feld, Public Knowledge's legal director. "The Department of Justice and the Federal Communications Commission stood up to tremendous lobbying pressure as AT&T spent tens of millions of dollars trying to push this merger through."
Feld said he hopes AT&T and T-Mobile will now focus on deploying their networks, "rather than trying to merge to duopoly," with AT&T and Verizon controlling nearly 80 percent of the U.S. mobile market if the merger had happened.
"These businesses are fundamentally sound, and have what it takes to bring broadband and jobs to America on their own," he added.
After the FCC's November announcement, AT&T withdrew its application at the FCC to transfer T-Mobile's spectrum licenses. The deal appeared to be doomed earlier this month when Judge Ellen Segal Huvelle, overseeing the DOJ case at the U.S. District Court for the District of Columbia, grilled AT&T's lawyers about how they expected to move forward with the acquisition without an active license transfer application at the FCC.
- Mobile First: Securing Information Sprawl Learn how the partnership between Box and MobileIron can help you execute a "mobile first" strategy that manages and secures both mobile apps...
- AIIM Trendscape: The New Mobile Reality This AIIM Trendscape report shares data, expert opinions, and a unique perspective on the impact of cloud and mobility in the enterprise, surfacing...
- Empowering Your Mobile Workers A modern mobile IT strategy is no longer an option, it is an absolute necessity. Here's how some of the nation's most progressive...
- Mobile Content, Collaboration & IDC's 3rd IT Platform: The Next Frontier for the Mobile Enterprise IDC focuses this article on talks about the new IT platform. This 3rd IT Platform will be the new wave for about the...
- On Demand: Mastering the Art of Mobile Content Management Mobile device usage in the enterprise has skyrocketed, and it continues to escalate. IT must answer to users who demand access to their...
- Why do you need an enterprise mobile platform? Today companies must offer great apps that run on a range of devices, and connect to an exploding set of backend data. Appcelerator... All Mobile/Wireless White Papers | Webcasts