AT&T ends its bid for purchasing T-Mobile USA after two U.S. agencies go against the company’s move. CEO and Chairman Randal Stephenson said that AT&T will “continue to invest” on the company’s own services. The $39 billion deal to buy rival T-Mobile from Deutsche Telekom, its parent company, is dead. AT&T will be paying a breakup fee of $4 billion that will be added to Deutsche Telekom’s fourth-quarter financial results.
The deal fallout also leads T-Mobile to gain a UMTS roaming agreement that lasts for more than seven years. This will heighten the possibly 230 million population coverage to 280 million potential customers. The AWS spectrum is also part of the settlement. T-Mobile now holds the spectrum for 128 Cellular Market Areas which includes Los Angeles, Washington, and San Francisco. Out of the top 20 market areas, T-Mobile holds the AWS spectrum for 12 markets.
AT&T wanted to use T-Mobile’s spectrum to help it handle the demands for its service on mobile broadband. The deal as Stephenson puts it was supposedly the answer for the mobile industry’s looming spectrum shortages. But both The U.S. Department of Justice and the Federal Communications Commission opposed AT&T.
An antitrust lawsuit was filed by the DOJ in August to block the AT&T and T-Mobile merger. FCC also released findings in November stating that the would-be acquisition is “contrary to the public interest.” If the merger went through, AT&T and Verizon would be controlling almost 80% of the entire United States mobile market.
Analysts have expressed their doubts on how AT&T can pull the deal and win the court’s approval as well as FCC’s. AT&T then withdrew its application to transfer spectrum licenses of T-Mobile at the FCC. And last week, a motion to hold the antitrust case was filed by the DOJ and AT&T.
The digital rights group Public Knowledge, lead the charge going against the merger. The group appreciated AT&T’s decision to drop the deal. The legal director of Public Knowledge Harold Feld mentioned that both the FCC and the DOJ stood firm after tremendous lobbying pressure, considering that AT&T spent millions of dollars to push the merger. He added that hopefully the two mobile carriers AT&T and T-Mobile can focus more on deploying their respective networks.
