AT&T/T-Mobile Deal Is Officially at an End
AT&T pulled the plug on its proposed buy of T-Mobile on Monday. AT&T said in a statement that, after “a thorough review of options it has agreed with Deutsche Telekom … to end its bid to acquire T-Mobile.” The announcement brings to an end the fight over AT&T’s dramatic announcement in March that it would buy one of the remaining three national carriers. The topic has dominated industry discussions since. AT&T did not comment on the size of the break up fee it ultimately will have to pay DT.
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"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 said in a statement released after the close of regular trading on the New York Stock Exchange. Shares dropped half a percentage point in the first hour of after-hours trading. “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 announcement said the carrier will take a charge of $4 billion in Q4, reflecting the break up fee and will enter a “mutually beneficial roaming agreement with Deutsche Telekom.” Unless AT&T and DT negotiated a reduced fee, AT&T had agreed to pay the German carrier $3 billion, plus AWS spectrum and roaming rights worth another $3 billion, as part of the merger agreement.
AT&T CEO Randall Stephenson said his company plans to continue its leadership of what he called “the mobile Internet revolution.” AT&T has invested more in its networks over the past four years than any other U.S. company and investments will continue, he said. “As a result, today we deliver best-in-class mobile broadband speeds -- connecting smartphones, tablets and emerging devices at a record pace - and we are well under way with our nationwide 4G LTE deployment.”