AT&T Throws the Towel in on T-Mobile Acquisition

And just like that, T-Mobile is safe (for now). AT&T has announced that they’re ending bids to acquire T-Mobile up against heavy resistance from the FCC and the Department of Justice.

Because the deal, which was expected to be accepted and in the finalizing stages in the first couple of months of 2012, fell through, AT&T owes T-Mobile’s parent company Deutsche Telekom $4 billion as well as a roaming agreement that AT&T states is mutually beneficial to both parties.

And all in the world of magenta let loose a deep sigh of relief. The question is – who will try next? We’re sure someone will. A lot of you want it to be Google, and – trust me – we’d want that too.

But as it stands, T-Mobile is T-Mobile and AT&T will look into other areas of investment and opportunities to improve service for their consumers (at least that’s what they say their motive behind the acquisition was). Read on for full press details.

AT&T Ends Bid to Add Network Capacity Through T-Mobile USA Purchase

Company Reaffirms Its Commitment to Mobile Broadband Leadership

DALLAS–(BUSINESS WIRE)–AT&T Inc. (NYSE: T) said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year.

“AT&T will continue to be aggressive in leading the mobile Internet revolution”
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. 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.

“AT&T will continue to be aggressive in leading the mobile Internet revolution,” said Randall Stephenson, AT&T chairman and CEO. “Over the past four years we have invested more in our networks than any other U.S. company. 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.

“To meet the needs of our customers, we will continue to invest,” Stephenson said. “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 nation’s longer-term spectrum needs.

“The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces,” Stephenson said.

To reflect the break-up considerations due Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011. Additionally, AT&T will enter a mutually beneficial roaming agreement with Deutsche Telekom.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation’s fastest mobile broadband network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile broadband and emerging 4G capabilities, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verse® and AT&T | DIRECTV brands. The company’s suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com. This AT&T news release and other announcements are available at http://www.att.com/newsroom and as part of an RSS feed at www.att.com/rss. Or follow our news on Twitter at @ATT.

© 2011 AT&T Intellectual Property. All rights reserved. Mobile broadband not available in all areas. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this press release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

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  • Jaswinder Singh

    It could be Dish Network as they have been talking about getting in the wireless business…

    • RobWild

      Yeah but Dish has some really poor customer support as it is. 

      • spicymeatball

        T-Mobile has great service and Dish could possibly benefit from that.

        • http://twitter.com/GotEmRunnin Christion L. McGraw

          I’ve heard that about T-Mobiles customer support.  who’s to say Ma Bell wouldn’t have benefited from that as well?  I don’t trust any company over the other but after getting screwed by sprint month over month; I switched to att and they have done right by me so far.  Granted I only stay 2 blocks from a brick and mortar att store and have only had to call customer service twice.  Their in-store agents are much better than over the phone, but with sprint I had awful service over the phone and face to face.  I guess it all comes down to personal experience.

  • sitnstew

    That’s an expensive failure for AT&T

    • SkeetSkeet88

      Yea a cool $4,000,000,000 loss on their end

      • Steven Skwarkowski

        Hmmmm…..and I wonder who is going to end up paying for that….

        • http://ashn.myopenid.com/ Ash

          Don’t worry, their customers will.

  • http://www.facebook.com/profile.php?id=1142720567 Joseph Lagalla

    First! and go majenta

  • Superguy

    Or DT will finally just let T-Mobile go down the tubes so the other buzzards can pick over the scraps.  Net result is pretty much the same – T-Mobile is gone whether AT&T bought them or not.

    Anyone else buying them is going to have to pony up a lot of cash to bring the network up and put LTE on it.  The question will be whether a new owner is willing to do that, or continue to T-Mo as a low cost, no frills type carrier.

    • WickedToby741

      Dish Network can. They’ve already expressed interest in deploying a nationwide LTE network and have even made spectrum purchases specifically to do so. Plus, they have specifically expressed interest in buying or making a deal with T-Mobile if the AT&T bid failed. Plus, Dish is already the low cost, no frills satellite TV provider, so I don’t see why they would screw with T-Mobile’s formula.

      • spicymeatball

        For me this is a perfect match.  I’m a value shopper because the frills usually come with someone’s hands in my pockets.  T-Mobile and Dish are both competitive in ways the big guys aren’t and that’s why they are great for consumers.  The big guys innovate to charge as much as they can for any additional service where Dish and TMo innovate to differentiate themselves.  Hard to explain but I get lot’s of perks from both.  T-Mobile picks up g1 android first.  Dish picks up integration with Logitech Revue first.

    • http://www.facebook.com/people/Cris-Tate/1820221201 Cris Tate

      The $4 Billion cash infusion they are about to get from the failed deal would go a long way to do that. As long a DT actually uses it for that and doesn’t just pocket it and dump T-mob some other way.

    • dbcad7

      T Mobile has been and continues to be profitable.. the merger thing was actually stupid, and for some reason has people thinking that T mobile was losing money.. All during this whole thing they have upgraded their HSPA+ network and still made profits.. LTE would be great, but HSPA+ is pretty good as it is, and doesn’t seem to drain peoples batteries as much as LTE. The roaming agreements can only help T mobile expand.. I am also certain there are many who “jumped ship” because of the merger that are regretting it and will come back.. Personally (that’s me) I don’t want anyone to buy them because as a company, other than the merger fiasco, they have done some smart things. I like them as they are.. I could care less if Verizon or AT&T users brag about how many users they have.. AOL had the most users too, that didn’t make it good.

  • curtst

    I am kind of disappointed.

    • ScottColbert

      Yes, because eliminating competition is so good for the consumer. 

      • chuckles87

        it is thats why apple wants to do it to

    • Guest

      I’M NOT! F’ ATT. I would have dropped my service the day the merger was complete. Now I don’t have to go to Verizon and pay $70 more per month, thank f’n god.

  • http://pulse.yahoo.com/_P6OZ24ZFDAGZSMZHLS7OMLIG34 Newbey

    Oh well. T-Mobile will be gone pretty soon, no biggie.  So get to work AT&T and bring me an LTE ICS phone!

    • spicymeatball

      T-Mobile is so much better than AT&T.  Sorry but there networks speeds are worse.  Yes they may have 3G in more places but it’s slow and often as slow as T-Mo edge speeds.  

    • Pink Floyd

      Nope.  

  • Sonelone

    I want to see some of that $4 billion going towards a widespread expansion of the network.

  • https://plus.google.com/102290060063255149992 Alek Tritt

    I like my service just fine without LTE. HSPA+ is great and I’ve never had any bad service. I don’t see why people look down on T-mobile. It’s a great carrier, and would not be hard to catch up with the big boys with some good investing.

    • Anthony Ross

      right so you understand that last comment is the last thing DT wants to do in the US right?  It will take a signifcant buy out and years before you see anything happen w/ Tmo.  I’m a 10yr Tmo customer and left today for the Galaxy Nexus on Verizon.  My HSPA+ phone was around 2.5mb down and 1.1 up, I’m now 9.5 mb down on the Gnex and 4.7 up, for only $9 more a mo?  No Brainer.

      • HalfwayCrook

        I’m 18mb down on tmo bro, ahahahahahahah! Byee

      • spicymeatball

        T-Mobile is clearly not right for everyone due to coverage but when t-mobile works it usually works well.  I won’t leave T-Mobile because for me I would have to pay $100 more a month.  I have a family plan and I buy my phones outright so what I’m paying is all on the table and not hidden in the crazy game of subsidized phones.

      • Pink Floyd

        I’m anywhere from 7-11Mbps.   1.5-2 up and those are and have been consistent for months.  And my bill is way less than anything I would do comparably on verizon.  I’ll take that trade-off personally.

      • Guest

        Suuuuuucks for you. My Tmobile HSPA+ device gets 9down and 3 up consistently. It’s all dependent on where you live, no company covers all. There’s places where Verizon only gets 3g, and barely gets that.

        And I don’t see how only $9 more per month. Every time I look into it, its over $70 more per month for unlimited everything like I have no on Tmobile.

        • lynyrd65

          There’s places where T-mobile only gets 2g, and barely gets that.

          • UMA_Fan

            Yeah in the boonies.  Use Wifi Calling.  T-Mobile is the only national carrier to support it.  It’s awesome and you get better battery life because it powers down your cellular radio.  You get perfect Tmo reception anywhere in the world.

            T-Mobile 2G isn’t that bad… If you want to look at it another way it’s on par with the speeds you get on Sprint’s 3G. Unlocked iPhones running on Edge only on Tmobile are getting faster speeds than the 4s on Sprint.

            You really should look at it as comparing T-Mobile’s nationwide HSPA+ footprint with Verizon’s and At&t’s LTE footprint. HSPA+ for being more efficient, cheaper, available in more places, and better with battery life WINS.

          • lynyrd65

            Except when I’m trying to listen to pandora on the highway….

      • UMA_Fan

        You realize HSPA+ 42 is a vastly different experience right?  A lot of the 4G devices on T-Mobile are 14mbps devices, a few Samsungs are 21mbps and the GSII and Amaze are 42mbps.  I get around 12 down on my Amaze and if Tmo doubles network speeds to 84 next year it can only go up.

    • WickedToby741

      Well you might get LTE anyways. Dish has expressed interest in deploying a nationwide LTE network and working out some sort of deal with T-Mobile which could include a buyout.

      • Scotsman of Loch Ness

        it would be interesting to see what Dish has in mind for T-Mo. Possibly to compete with ATT with TV, Internet, and Mobile.

        Another interesting merger (though one is CDMA and the other is GSM) would be with Sprint. T-Sprint Mobile would then be much closer in size to AT&T and VZW. 

        The downside to a merger with Sprint would be bringing the country down to 3 major Mobile Providers whereas a merger with Dish would keep the competition at 4.

  • WickedToby741

    Google CAN’T purchase T-Mobile. You think anti-trust regulators were swarming over the AT&T deal, I guarantee they’re salivating over a Google takeover prospect. The company is already thought to be too large and comprehensive by a lot of people. Add in a mobile network and things get way more complicated. I honestly hope Dish buys them or at least sets up a deal with them.

    • hldc1

      A comment of mine over on a similar story on Android Police (http://www.androidpolice.com/2011/12/19/official-att-cancels-plans-to-purchase-t-mobile-eats-4-billion-what-now-for-t-mo/):

      This whole acquisition thing was all very interesting. It cracks me up that AT&T wanted to spend $39 billion to basically eliminate a competitor. Now, they’ll have to cough up $4 billion and a roaming agreement. Makes that $3.6 billion Verizon spent on AWS spectrum look pretty golden.

      If I was Deutsche Telekom, I wouldn’t get into bed with AT&T. I’d work on some sort of joint venture with Dish Network (which has AWS spectrum) or even Verizon (on the verge of acquiring AWS spectrum).

    • Torish

      A Googke deal might be tough, but it would be easier than the AT&T deal because Google wont be eliminating a  competitor like AT&T tried to do. The better reason that the Google deal wont likely happen is because it could hurt carrier support for Android.

      • phoenix_fire

        it’d be rejected because it would be VERY close to a vertically integrated monopoly. all google would really need to do is buy out a supplier of materials for the phones and then boom, a monopoly.

        • Mateusz Wszolek

          first of all they have moto, so no need to buy anything
          second, that would not be a monopoly, they would still have competition…

          • phoenix_fire

            moto is a producer, not a supplier, so yeah, they’d have to buy a company that supplies the direct materials for it to be vertically integrated.

            second, att would have stll had competition, and yet there was huge anti trust investigation. ma bell had competition and yet they were still broken up for being too close to a monopoly. google would have had an incredibly unfair advantage, being that it in my hypothetical example, it controlled supply lines, production times/quality, and distribution, so they could set prices however they wanted, leading to antitrust agencies coming down on them hard and maybe even forcing a break up of the company.

          • http://pulse.yahoo.com/_FLQJVJWSPTNJHSN5HSGNNEPLSA Cortney

            Vertical integration really isn’t a big concern. Comcast just did it in its acquisition of NBC-Universal.  The distributor (of TV/internet) purchased the producer (of TV shows).

            Plus, not only is Google a new market entrant, but it will preserve a significant 4th competitor…

  • HalfwayCrook

    W000000000000000000000000000000000000000000000000000000000t

  • bmg314

    HHHaa Att… Smacked down like the punk ass bitches you are!!!

  • Torish

    Is it too soon to sing, “Ding dong the witch is dead…”

  • tizzyzz

    I am glad to hear this I have att and figured they would be the bully in the sandbox if they got t mobile. Hope t mobile does find a good home with another partner just not att. About time att gets what they deserve a punch in the gut

  • CapnBoost

    AT&T is sitting on the most unused bandwith of any national carrier, so they didn’t need tmobile’s spectrum.  What they wanted was a bunch more customers (and in my estimation, a monopoly on GSM in the US).  

    I’m glad that it failed, but I’m still concerned with what DT plans for magenta.

  • Jeff432

    It’s extremely likely that another company will try to buy T-mobile, but I hope that company is Dish Network.

  • Luis Figueroa

    Google should buy T-mobile or invest on it. G-mobile,rules!!!

  • Eric Keenan

    There are MVNO’s out there with as much coverage and half the rates as Tmobile.  IMO, Tmobile is still in a bad spot.  Hopefully this failed deal results in an expansion of their dismal voice/text footprint.  But data is the new king and this failure does not expand tmobiles position in that realm.

    • Rudy Belova

      Yeah, but try and get them with 42Mb/s HSPA+ on prepaid! I laugh at the virgin mobile, boost mobile and the rest.. lol. i want speed.
      Plus, who can beat t-mobile’s 100 minute, unlimited text, 5gb 4g data for $30? Nobody.