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AT&T drops bid to acquire T-Mobile

post #1 of 45
Thread Starter 
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 nations 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.
post #2 of 45
Good.
post #3 of 45
Quote:
citing opposition from federal regulators.

And customers.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #4 of 45
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.
post #5 of 45
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.
post #6 of 45
T-Mobile will start auctioning off its spectrum to cover it's losses.
post #7 of 45
Good news. The US needs more carriers not less.
post #8 of 45
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.

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post #9 of 45
Moar pink dress girl commercials!
post #10 of 45
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
post #11 of 45
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.
post #12 of 45
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.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #13 of 45
david stern stepped in to block this deal for "basketball reasons"
post #14 of 45
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).
post #15 of 45
This is a huge win for every US mobile phone customer and a minor win for every mobile phone customer outside the US.
Mac user since August 1983.
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Mac user since August 1983.
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post #16 of 45
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.
post #17 of 45
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.
post #18 of 45
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.
post #19 of 45
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.
post #20 of 45
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.
post #21 of 45
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.
post #22 of 45
Quote:
Originally Posted by easy288 View Post

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.

Shame for you guys, but you'd be paying much, much more had it gone through.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #23 of 45
Quote:
Originally Posted by easy288 View Post

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.

Not really. The US Taxpayer will pay for about $2 Billion of it due to the tax write off.

Way to go DOJ/FCC: Stop a US based company from buying wireless spectrum that is owned by a German company and now we, the US Taxpayer, must pay for much of the backout fee.
post #24 of 45
Prediction: TMobile will be dead and gone (or sold off in pieces) in less than a year. Shareholders will be smart to (and probably will) take the $4B and run.
post #25 of 45
Quote:
Originally Posted by mcarling View Post

This is a huge win for every US mobile phone customer and a minor win for every mobile phone customer outside the US.

I just hope this means my t-mobile moderate map coverage will actually yield a signal. This has been the worst cell phone service I have ever had. Here's hoping I will get something better before my contract ends.

I was actually looking forward to a merger so I could get into an AT&T plan that has service in my area. Now that's gone down the drain. Oil well...
post #26 of 45
at&t has done NOTHING for years to reinforce their infrastructure. they've been completely complacent in reaping in the profits while providing sub-standard service.

then, they tell everyone they're upgrading their infrastructure. rather than actually upgrade their existing infrastructure, they decide to purchase t-mobile.

fuckers. glad they dropped their bid. and, finally, the feds actually did something right.
post #27 of 45
Quote:
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.

why do I think that Apple won't be making that unique version for T-Mobile and they will only gain the iPhone when it goes LTE and then only if it can fall back on Edge.

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(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

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post #28 of 45
Quote:
Originally Posted by mac_dog View Post

at&t has done NOTHING for years to reinforce their infrastructure. they've been completely complacent in reaping in the profits while providing sub-standard service.

then, they tell everyone they're upgrading their infrastructure. rather than actually upgrade their existing infrastructure, they decide to purchase t-mobile.

fuckers. glad they dropped their bid. and, finally, the feds actually did something right.


You have NO clue what you are talking about. AT&T has spent more than any other company to build its wireless infrastructure. IGNORANT fool.
post #29 of 45
Quote:
Originally Posted by k2director View Post


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.

...


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.




The government bureaucrats started it all a long time ago, when they broke up AT&T. Would we all be better today off had they not done that?
post #30 of 45
Quote:
Originally Posted by easy288 View Post

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.

Nope. Companies can't raise their prices just because their costs have gone up.

The shareholders will pay for it. They already have.
post #31 of 45
Quote:
Originally Posted by anantksundaram View Post

Prediction: TMobile will be dead and gone (or sold off in pieces) in less than a year. Shareholders will be smart to (and probably will) take the $4B and run.

We could use a good place to keep track of all these predictions. We see a lot of them here.

Somebody should start a web-accessible calendar that would hod them and we could see which ones have come true as the years roll by.

Six months from now, the Google Tab is due. In 12 months, TMo dead. What else?
post #32 of 45
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.


It's Not about T-Mobile USA only. T-Mobile USA is owned by the Deutsche Telecom (DT) of Germany who are in serious debt trouble. In current financial crisis especially in Europe, they are desperate to reduce their debt and that needs a huge amount of cash.

Selling the US operation can give it the needed cash, holding onto the operation and the 332 million yearly profit will not help much. DT is looking to cut debt by $16.9 billion. At $332 million a year, it would take 50 years to achieve that goal. So, the solution is to sell it at $ 39 billion.

Look in this article <http://www.bloomberg.com/news/2011-12-19/at-t-pulls-39-billion-t-mobile-bid-after-regulator-opposition.html>. Bloomberg is a much more reliable source than Engadget for financial matters.
post #33 of 45
Quote:
Originally Posted by mac_dog View Post

at&t has done NOTHING for years to reinforce their infrastructure. they've been completely complacent in reaping in the profits while providing sub-standard service.

then, they tell everyone they're upgrading their infrastructure. rather than actually upgrade their existing infrastructure, they decide to purchase t-mobile.

fuckers. glad they dropped their bid. and, finally, the feds actually did something right.

Are you an AT&T user?

If yes, why did you hold onto them when you have other options?

If no, your comments have no value at all.

Either way, you look like a loser, trying to attract attention.
post #34 of 45
1) That's for last quarter not last year.

2) You can cut debt by dropping your cost centers better than you can by severing ties to profit centers.

3) They are getting 1/4th their debt cut from AT&T. That should give DT a little breathing room.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #35 of 45
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.

Please put in a little effort and google the term "rent seeking behavior" so maybe you can understand the proposed merger from the point of view of society's greater good instead of a corporation's greater profits or a CEO's greater bonus.
post #36 of 45
Quote:
Originally Posted by Tsun Zu View Post

It's Not about T-Mobile USA only. T-Mobile USA is owned by the Deutsche Telecom (DT) of Germany who are in serious debt trouble. In current financial crisis especially in Europe, they are desperate to reduce their debt and that needs a huge amount of cash.

Selling the US operation can give it the needed cash, holding onto the operation and the 332 million yearly profit will not help much. DT is looking to cut debt by $16.9 billion. At $332 million a year, it would take 50 years to achieve that goal. So, the solution is to sell it at $ 39 billion.

Look in this article <http://www.bloomberg.com/news/2011-12-19/at-t-pulls-39-billion-t-mobile-bid-after-regulator-opposition.html>. Bloomberg is a much more reliable source than Engadget for financial matters.

So what? Who cares if DT is in debt over their heads? So the US consumer is supposed to take it in the you-know-where so DT's executives don't need to resign in disgrace?

T-Mobile is worth $39 Billion to AT&T because it can factor in the increased profits (from an enhanced ability to jack up prices) that they will get as a result of the vastly increased market power that the merger will give them. I am not willing to be one of millions of patsies who will fill AT&T's coffers for them.

If DT really needs the cash, even after their $4B payday, then they can sell T-Mobile to someone other than AT&T or Verizon, and sure they won't be able to demand $39 Billion, but hey, it's nobody's job in the US government to ensure that DT gets as much money as they can get for T-Mobile.

I'm so sick and tired of all these people apologizing for these rapacious monopolists.
post #37 of 45
Quote:
Originally Posted by charlituna View Post

why do I think that Apple won't be making that unique version for T-Mobile and they will only gain the iPhone when it goes LTE and then only if it can fall back on Edge.

How much would it really cost Apple to develop a version compatible with T-Mobile's network? Now that the uncertainty of whether T-Mobile will switch over to AT&T's network is gone, I bet a T-Mobile version of the iPhone is on its way.
post #38 of 45
Maybe now AT&T will take the money they were going to use for this merger and work on improving their network themselves, rather than 'buying' into an improved network. Their 2G signal in some parts of my area isn't strong enough to pick up inside some restaurants and grocery stores.
post #39 of 45
Not sure how anyone other than AT&T corporate could be upset about this decision. T-Mobile is the only major carrier that still offers competitive pricing for mobile voice and data. If only Apple could be convinced to produce an iPhone that works on their 3/4G data band. Even though I despise contracts (using an iPhone 4S on prepaid AT&T MVNO currently), I would immediately jump on a T-Mobile iPhone contract. This is the consumer begging you Apple, PLEASE MAKE A DEAL WITH T-MOBILE. I don't care if the phone is $100 more w/ contract. Just make it happen.
post #40 of 45
Quote:
Originally Posted by TBell View Post

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.

This. +1 Your other comments are spot on here too.

I despise government intervention, but I fail to see how a US wireless duopoly and a GSM monopoly is in any way good for the consumer or was going to create 'tens of thousands of jobs' as they promised. Verizon has looked at buying Sprint a few times in the last 10 years but never pulled the trigger either, probably knowing it would only end in something like this.
I'm not a pessimist. I'm an optimist, with experience.
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