AT&T is ending its $39 billion bid for T-Mobile, a proposed merger that had drawn considerable pushback from federal regulators and rival carrier Sprint.
decided to end its $39 billion bid for T-Mobile USA, the company announced in a
statement Dec. 19.
continue to be aggressive in leading the mobile Internet revolution," AT&T
CEO Randall Stephenson wrote in that statement. "Over the past four years, we
have invested more in our networks than any other U.S. company."
also alluded to "actions by the Federal Communications Commission and the
Department of Justice" to block the transaction, something AT&T said would
not "change the realities of the U.S. wireless industry." The carrier added
that acquiring T-Mobile "would have offered an interim solution" to spectrum
shortage, and that "in the absence of such steps, customers will be harmed and
needed investment will be stifled."
In the wake of
the collapsing deal, AT&T will pay T-Mobile parent Deutsche Telekom some $4
billion in breakup fees, which will show up as a pretax accounting charge in
the fourth quarter of 2011. It will also enter into what the statement
described as a "mutually beneficial roaming agreement" with Deutsche Telekom,
although further details were not disclosed.
AT&T and the Justice Department had mutually agreed to stay a looming antitrust
trial over the acquisition. The judge in that case agreed with the motion, and
set Jan. 12 as the date for AT&T to file a report detailing any revised
plans for the acquisition. In the interim, though, the carrier decided to
scuttle its ambitious plans altogether.
2011, when AT&T first announced it wanted to acquire T-Mobile, a number of
parties reacted poorly. Some lawmakers argued the deal would harm competition.
Sprint announced its intention to fight the merger with every legal tool in its
arsenal, eventually filing a lawsuit.
AT&T executives argued the deal would prove beneficial for the wireless
industry, by providing economies of scale while increasing the reach of its
network. That reasoning didn't persuade the Justice Department, however, which
by September had filed its antitrust suit to permanently block the buyout. In
November, FCC chairman Julius Genachowski began circulating a draft order
referring the merger to an administrative law judge for trial, arguing that said
merger wasn't in the public interest.
study of internal documents obtained from AT&T and T-Mobile helped the
regulators arrive at that decision, according to one FCC official. Staff
reviewing those documents concluded that the merger's touted benefits did not
align with the facts at hand. Even then, an FCC action against the merger
couldn't begin until the Justice Department concluded its antitrust suit.
argued repeatedly that no settlement would satisfy it. AT&T responded to its
rival's campaign with a series of ads in Washington, D.C., newspapers accusing
it of being disingenuous. Had the case gone to trial, certainly that war of
words would have continued.
For now, it
seems Sprint can claim something of a victory. And 2012 will begin with four
major carriers remaining in the United
Follow Nicholas Kolakowski on Twitter