AT&T Drops $39 Billion Bid for T-Mobile

By Bizclik Editor


After nine months of efforts and litigation, AT&T has officially decided to end its fight to acquire T-Mobile USA. The $39 billion dollar bid—which would have been this year’s biggest acquisition deal—would have formed the nation’s largest cellphone service network but was opposed by federal regulators and rivals.

AT&T says it reviewed its options and came to the conclusion that it would not be able to sway the opinion of the Federal Communications Commission, which filed suit to block the transaction amid antitrust worries.

This decision is a significant setback for AT&T, as it would have benefited hugely from the acquisition of T-Mobile’s spectrum, or cellular airwaves, in order to lessen network congestion and enable faster service.

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 “To meet the needs of our customers, we will continue to invest,” AT&T Chairman and CEO Randall Stephenson said in a statement. “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 US 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.”

The FCC may not be willing to back down from its opposition of the merger, but it does acknowledge AT&T’s point about the nation’s spectrum supply.

“The FCC is committed to ensuring a competitive mobile marketplace that drives innovation and investment, creates jobs and benefits consumers,” said FCC Chairman Julius Genachowski in a statement. “This deal would have done the opposite. The US mobile industry leads the world in mobile innovation, and we agree with AT&T that Congress should pass incentive auction legislation that will unleash new spectrum for mobile broadband.”

As with all tumultuous breakups, AT&T won’t be walking away from this decision to split without a little baggage and drama. The company will have to pay T-Mobile’s parent Deutsche Telekom $4 billion in cash and wireless spectrum access as a break-up fee, as agreed under terms of the merger announced in March.


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