AT&T abandons T-Mobile USA acquisition bid
by Steven Mostyn - Dec 20 2011, 14:34
Four arrested after compromising phones to fund terror group. Image: AT&T.
American telecommunications titan AT&T has this week admitted defeat in its nine-month attempt to acquire market rival Deutsche Telekom’s regional arm T-Mobile USA.
According to AT&T, its failed purchase bid of $39 billion USD is not down to resistance from T-Mobile but rather opposition from regulatory bodies within the industry.
AT&T is also likely to be reeling somewhat given CEO Randall Stephenson’s overt confidence that the acquisition would sidestep regulatory scrutiny and leave the company as the largest wireless carrier in the U.S. market.
That confidence even translated into AT&T promising Deutsche Telekom a $4 billion USD break-up package if the deal went south—which it now clearly has after pressure exerted by the U.S. Justice Department.
Reuters reports that AT&T will now “have to find another way to address its shortage of wireless airwaves”, while Deutsche Telekom must look elsewhere to offload “the struggling U.S. business it had desperately wanted to shed”.
If the T-Mobile USA deal had received regulatory approval, AT&T’s customer base would have swollen to around 134 million, pushing the company well beyond current market leader Verizon and its 108 million customers.
Opposition to the bid claimed AT&T’s absorption of T-Mobile USA would remove a core industry player and aggressive pricing competitor, which would, in turn, drive up subscription costs placed on consumers.
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