Today AT&T officially called it quits as they have ceased and will no longer acquire T-Mobile. The AT&T merger seemed to be doomed from day one as T-Mobile subscribers, the CEO of Sprint, the FCC and the Department Of Justice have all expressed their disapproval of the pending merger as it would cause a GSM monopoly within the wireless industry. Back in March when the acquisition was first made public there was penalty for AT&T in case the acquisition didn’t go through.
So now AT&T has to pay up a total of $4 billion total ($3 billion in cash & $1 billion in spectrum) to T-Mobile’s parent company Deutsche Telekom along with a 3G roaming agreement. So for now there are still four carriers but Deutsche Telekom will still search for a buyer for T-Mobile. AT&T will continue to do business as usual, Sprint is relieved, and Verizon is counting $$$ still not concerned about the so-called ‘competition’. More details lie within the official press releases below.
AT&T Ends Bid to Add Network Capacity Through T-Mobile USA Purchase
Company Reaffirms Its Commitment to Mobile Broadband Leadership
DALLAS, Dec 19, 2011 (BUSINESS WIRE) — AT&T Inc. 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.
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.
Dear colleagues,
Today AT&T and Deutsche Telekom announced they have mutually decided to terminate their agreement for AT&T to acquire T-Mobile USA. This announcement effectively ends the acquisition process launched March 20, including the regulatory approvals process with the Department of Justice and the Federal Communications Commission. Additionally, with the termination of the agreement, T-Mobile will receive certain spectrum licenses and a 3G roaming agreement from AT&T, and AT&T will pay $3B to our parent company, Deutsche Telekom.
What does this mean for T-Mobile USA? Our Challenger Strategy continues as before, with energy and focus. We have seen early successes with our great 4G network, affordable unlimited rate plans and strong Android portfolio. We now have an exciting chance to build upon these and other strengths to bring our business to the next level of success and beyond. We have an opportunity to write our own future – making the latest mobile products and services affordable to more people. We call it “4G for All.” We’ll continue on this path through 4G network leadership, affordable smartphones, being a trusted brand, evolving as a multi-segment player, and executing our Challenger business model.
The leadership team and I will be meeting intensively in the next few weeks on our go-forward plans for the business, to identify and map out any and all options to further strengthen our strategy and prospects for the future.
I know you also want to know what this means in terms of retention bonuses and other details that impact you personally. I promise to make that information available to you in the coming days and weeks on OneVoice and through your leaders.
Most importantly, I want to thank you for the amazing effort and focus each of you put into the business over the last nine months following the acquisition announcement. You performed well under extraordinarily unusual circumstances. Thank you for your ongoing commitment and support.
Let’s now go into the new year and show everyone we are, indeed, ready to be Challengers!
With sincere appreciation,
Philipp Humm
CEO & President
T-Mobile USA
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