AT&T drops bid to acquire T-Mobile

Posted:
in iPhone edited January 2014
AT&T has given up its efforts to buy carrier T-Mobile, citing opposition from federal regulators.



A statement by AT&T says the company will take a pretax charge of $4 billion that was stipulated in the agreement between the two carriers if the deal were dropped before being finalized.



In addition to the payoff, T-Mobile patent company Deutsche Telekom is also entering into what AT&T described as "mutually beneficial" roaming agreements with its attempted buyer.



"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry," AT&T stated. "It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled."



The merger was opposed throughout the year by the US FCC and the DOJ, both of whom cited limited competition and job layoffs as reasons for opposing the deal.



AT&T's chairman and chief executive Randall Stephenson wrote that "to meet the needs of our customers, we will continue to invest. 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."



It is not known if the new roaming agreement between T-Mobile and AT&T would enable Apple to sell its existing iPhone models to T-Mobile, or if it would still need to develop a unique version of the iPhone to sell on the carrier, which uses a different AWS band for 3G service than the rest of the GSM/UMTS world.
«13

Comments

  • Reply 1 of 44
    Good.
  • Reply 2 of 44
    Quote:

    citing opposition from federal regulators.



    And customers.
  • Reply 3 of 44
    As much as people have resisted the acquisition, DT was the one selling the business unit. You have to question what they will do with a money losing business? I would bet that without a friendly acquisition by someone else, chances are good that they'll go away - which doesn't help consumer choice at all.



    Maybe it will be good to get rid of them and let ATT just buy up their bandwidth.
  • Reply 4 of 44
    Quote:
    Originally Posted by jmgregory1 View Post


    As much as people have resisted the acquisition, DT was the one selling the business unit. You have to question what they will do with a money losing business? I would bet that without a friendly acquisition by someone else, chances are good that they'll go away - which doesn't help consumer choice at all.



    Maybe it will be good to get rid of them and let ATT just buy up their bandwidth.



    Maybe T-Mobile can put some of the money from AT&T into building up their own infrastructure. The U.S. needs more mobile competition, not less.
  • Reply 5 of 44
    T-Mobile will start auctioning off its spectrum to cover it's losses.
  • Reply 6 of 44
    Good news. The US needs more carriers not less.
  • Reply 7 of 44
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by mdriftmeyer View Post


    T-Mobile will start auctioning off its spectrum to cover it's losses.



    With $4 billion you can buy yourself something pretty. For comparison, Verizon spent $4.7 billion for 7 Block C 700MHz licenses and the total for all 700Mhz licenses for all blocks of the auction was under $20 billion.
  • Reply 8 of 44
    vandilvandil Posts: 187member
    Moar pink dress girl commercials!
  • Reply 9 of 44
    Quote:
    Originally Posted by jmgregory1 View Post


    As much as people have resisted the acquisition, DT was the one selling the business unit. You have to question what they will do with a money losing business? I would bet that without a friendly acquisition by someone else, chances are good that they'll go away - which doesn't help consumer choice at all.



    Maybe it will be good to get rid of them and let ATT just buy up their bandwidth.



    T-Mobile IS NOT a money losing business unit. That's just smoke and mirrors. Don't ever believe anything corporation says. Profits are down but they are not in the red. Their quarterly reports say so on their own site
  • Reply 10 of 44
    Quote:
    Originally Posted by lightstriker View Post


    T-Mobile IS NOT a money losing business unit. That's just smoke and mirrors. Don't ever believe anything corporation says. Profits are down but they are not in the red. Their quarterly reports say so on their own site



    T-Mobile is a huge debt bin. It's parent Deutsche Telekom is also heavily indebted.



    http://www.google.com/finance?q=ETRTE



    Sorry, but the absurd price T-Mobile bought @auction is going to come back to haunt them.
  • Reply 11 of 44
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by mdriftmeyer View Post


    T-Mobile is a huge debt bin. It's parent Deutsche Telekom is also heavily indebted.



    http://www.google.com/finance?q=ETRTE



    Sorry, but the absurd price T-Mobile bought @auction is going to come back to haunt them.



    "Net income, meanwhile is at $332 million -- up 57-percent from Q2 2011 and four-percent from Q3 2010. The quarter also saw the addition of 126,000 customers [to 33 million] […] a marked improvement from the loss of 50,000 last quarter." Doesn't sound that bad to me.
  • Reply 12 of 44
    david stern stepped in to block this deal for "basketball reasons"
  • Reply 13 of 44
    noirdesirnoirdesir Posts: 1,027member
    Quote:
    Originally Posted by SolipsismX View Post


    "Net income, meanwhile is at $332 million -- up 57-percent from Q2 2011 and four-percent from Q3 2010. The quarter also saw the addition of 126,000 customers [to 33 million] [?] a marked improvement from the loss of 50,000 last quarter." Doesn't sound that bad to me.



    Seen from Germany, I think the argument was that T-Mobile (USA) was loosing market share for quite some time (and have so far no LTE transition plan whatsoever).
  • Reply 14 of 44
    mcarlingmcarling Posts: 1,106member
    This is a huge win for every US mobile phone customer and a minor win for every mobile phone customer outside the US.
  • Reply 15 of 44
    My god, there's so much knee-jerk populism and brain-dead anti-business rhetoric here.



    As industries mature, as the cel phone industry is doing, they ALWAYS consolidate. Car companies, computer companies, airlines, etc. etc. etc. You can sit on your dumbass high-horse all day long and cite "what's best for the consumer" but it doesn't change the market conditions that real-world companies and their management have to cope with. They can't get by on smug populist rhetoric, they actually have to make their businesses work.



    And T-Mobile hasn't been working for a long time. Neither has Sprint, for that matter. All the government and its mindless supporters have done is interfere with a natural elimination of weaker competitors, which is necessary to maintain a healthy industry where companies are in a position to make money and thrive. Our ever-meddling government not only prevented that essential act from happening in this particular case, but it's also discouraged many similarly necessary acts from occurring in the future, because companies will fear wasting untold time and money pursuing acquisitions that a fickle government can nix at any time.



    Having too many competitors, like having too many rabbits or deer on an island, leads to them all being sick and malnourished. It's not good for the consumer. It's especially not good for shareholders like T-Mobile. All it's good for are a bunch of government bureaucrats who need to justify their salaries and lord over people they have no business interfering with.
  • Reply 16 of 44
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by jmgregory1 View Post


    As much as people have resisted the acquisition, DT was the one selling the business unit. You have to question what they will do with a money losing business? I would bet that without a friendly acquisition by someone else, chances are good that they'll go away - which doesn't help consumer choice at all.



    Maybe it will be good to get rid of them and let ATT just buy up their bandwidth.







    The problem with your assessment is it isn't based on fact. T-Mobile earnings reports clearly state it is highly profitable. Carriers much smaller than T-Mobile are profitable. Further, recent statements by DT state the US market is the most promising. T-Mobile's biggest problem is the lack of the iPhone, which Apple likely wasn't going to provide while the uncertainty of the AT&T deal hung in the air. Considering DT is a big Apple partner in Europe, the iPhone will likely come to T-Mobile now.



    Moreover, if your house was worth $200, 000 and I approached you and offered you $600, 000 for it, you probably would agree to sell because I was over paying you. Similarly, DT was willing to sell T-Mobile because AT&T was over paying it. DT was going to take a significant stake in AT&T; and the executives were going to garner big pay days. AT&T stock pays a dividend. So, DT would make money without doing anything.





    The airwaves, however, are owned by the public. So, the deal had to benefit the public. It clearly did not.
  • Reply 17 of 44
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by mdriftmeyer View Post


    T-Mobile will start auctioning off its spectrum to cover it's losses.



    Cover its losses? What losses? It is PROFITABLE. Moreover, AT&T will now be paying it 4 Billion, which includes Spectrum. This will benefit T-Mobile and its customers.
  • Reply 18 of 44
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by mdriftmeyer View Post


    T-Mobile is a huge debt bin. It's parent Deutsche Telekom is also heavily indebted.



    http://www.google.com/finance?q=ETRTE



    Sorry, but the absurd price T-Mobile bought @auction is going to come back to haunt them.





    Your link shows nothing of value. Try this instead.





    T-Mobile is profitable. It increased its earnings last quarter and added 125, 000 new subscribers all while this AT$T mess was going on.
  • Reply 19 of 44
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by k2director View Post


    My god, there's so much knee-jerk populism and brain-dead anti-business rhetoric here.



    As industries mature, as the cel phone industry is doing, they ALWAYS consolidate. Car companies, computer companies, airlines, etc. etc. etc. You can sit on your dumbass high-horse all day long and cite "what's best for the consumer" but it doesn't change the market conditions that real-world companies and their management have to cope with. They can't get by on smug populist rhetoric, they actually have to make their businesses work.



    And T-Mobile hasn't been working for a long time. Neither has Sprint, for that matter. All the government and its mindless supporters have done is interfere with a natural elimination of weaker competitors, which is necessary to maintain a healthy industry where companies are in a position to make money and thrive. Our ever-meddling government not only prevented that essential act from happening in this particular case, but it's also discouraged many similarly necessary acts from occurring in the future, because companies will fear wasting untold time and money pursuing acquisitions that a fickle government can nix at any time.



    Having too many competitors, like having too many rabbits or deer on an island, leads to them all being sick and malnourished. It's not good for the consumer. It's especially not good for shareholders like T-Mobile. All it's good for are a bunch of government bureaucrats who need to justify their salaries and lord over people they have no business interfering with.





    This is all good and well, but where your arguments fail is that the Carriers do not own the airwaves, they merely have a non-transferable license. The government has a responsibility to make sure the public is benefiting from the lease of the airwaves. The reality is the Carriers got a right to use the airwaves at an incredible good price because of their lobbying power. Moreover, AT&T owes its existence not to the free market, but a government granted monopoly.



    T-Mobile is profitable. Moreover, it added 125, 000 subscribers during this AT&T mess. Allowing AT&T to acquire T-Mpbile's spectrum licenses would harm the public by increasing cost, sending 40, 000 people to the unemployment line, which the public pays for, adds to urban blight as the T-Mobile's Stores close, and kills a local source of tax revenue used to pay for public services. Moreover, it hurts innovation. You will notice Google and Apple didn't come out supporting the deal. More carriers is better for hardware manufacturers.
  • Reply 20 of 44
    Quote:
    Originally Posted by Tallest Skil View Post


    And customers.



    And guess who will ultimately pay for the $3 to $4 billion failed merger costs? You guessed it, AT&T customers. I already expect the annual January $3 increase for my landline, just like the last three years. I fully expect another increase for my dsl also.
Sign In or Register to comment.