Skip to main content

AT&T gives up on buying T-Mobile

t-mobile-at-t-merger
Image used with permission by copyright holder

The bigger they are, the harder they fall: AT&T has formally abandoned its bid to take over number-four U.S. mobile operator T-Mobile. As a result, AT&T will take a $4 billion pretax charge during the fourth quarter of 2011 as part of its agreed-upon breakup fee; the terms of the deal also have AT&T required to relinquish assets and other services as part of the failure. However, AT&T also says it will enter into a “mutually beneficial” roaming agreement with Deutche Telekom, although no details have been spelled out.

AT&T placed blame for the merger failure squarely at the feet of the U.S. Justice Department and the Federal Communications Commission, both of whom came out against the deal. Regulators argued that allowing the two companies to combine would reduce competition in the wireless marketplace and harm consumers. AT&T maintains that the U.S. wireless industry is one of the most “fiercely competitive” in the world, with a glaring need for new spectrum. According to AT&T, acquiring T-Mobile would have been a stopgap measure in the spectrum crisis, but dropping the merger will ultimately harm consumer and stifle investment in mobile services.

“AT&T will continue to be aggressive in leading the mobile Internet revolution,” said AT&T chairman and CEO Randall Stephenson, in a statement. “However, adding capacity… 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… Second, policymakers should enact legislation to meet our nation’s longer-term spectrum needs.”

AT&T’s decision to abandon the merger comes on the heels of reports that company has been unsuccessful trying to sell off portions of T-Mobile to regional players like Metro PCS, Leap Wireless, and C Spire in a bid to make a combined AT&T/T-Mobile more palatable to regulators.

The immediate future for both AT&T and T-Mobile is not clear. T-Mobile will get a cash infusion from the breakup fees, but Deutche Telekom has indicated that it is not interested in investing any more capital in T-Mobile USA, and the AT&T takeover move has lead to many talent and executive defections at T-Mobile. T-Mobile also still has no clear path to LTE 4G services, although the company is presumably now free to pursue deals with the likes of satellite-assisted services like LightSquared or Dish Network, if they ever get up and running.

AT&T can attempt to move forward with its own LTE network, but it doesn’t have enough spectrum licenses to go nationwide with LTE service. It is in the process of bringing more spectrum online that it acquired from Qualcomm, but there are no significant new spectrum blocks coming up for auction in the near future. The FCC is looking at conducting an auction for licenses in the 500MHz block, but those are several years away, and it’s not clear how effectively existing wireless operators can roll out 4G mobile broadband services using their existing licenses. It’s a problem faced by every mobile operator, not just AT&T.

Sprint may be the biggest winner in AT&T’s decision to abandon its takeover bid for T-Mobile. Not only does Sprint avoid being (by far) the smallest national carrier in the United States, but it also puts itself in a good position to start leasing 4G capacity to other players who are hard up for spectrum. Wth Clearwire and up to half of LightSquared’s intended capacity in its pocket, Sprint might wind up holding all the cards for T-Mobile’s 4G aspirations.

Editors' Recommendations

Geoff Duncan
Former Digital Trends Contributor
Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…
Mint Mobile free trial: Get a week of free cellular service
Mint mobile banner image.

Mint is considered one of the best prepaid phone plans — It offers access to T-Mobile's 5G network, lets you prepay for months at a time for lower-cost service, and works with some of the best smartphones on Earth. It's also one of the best MVNOs, which means a Mobile Virtual Network Operator using another provider's network. You may recognize it for its popular and particularly well-liked spokesman, Ryan Reynolds. But soon, you'll also recognize it for something else, reasonable costs, and dare we say, its exceptional free trial. If you haven't guessed already, we're going to talk about the Mint Mobile free trial in a little more detail below, but if you'd rather get started, and give it a try right this instant, you can always do that, too.

Is there a Mint Mobile free trial?

Read more
Have T-Mobile? Your 5G service is about to get much faster
U.S. map illustrating T-Mobile's 5G Ultra Capacity network expansion.

T-Mobile’s 5G network already offers unmatched 5G speeds and coverage throughout the U.S., with 98% of the population covered by some flavor of T-Mobile’s 5G and more than 90% benefiting from its higher-speed 5G Ultra Capacity (5G UC) network.

That translates to the “Uncarrier” taking first place in 5G performance in 46 U.S. states. However, T-Mobile isn’t content to sit at 90% coverage. It’s been working steadily to increase the footprint of its 5G UC network to reach even further, and is bringing those top speeds to areas previously served only by its lower-frequency 5G Extended Range network.
A ‘Massive 5G Boost’

Read more
Best Buy just knocked $120 off the Garmin Venu 2 Plus smartwatch
Garmin Venu 2 Plus smartwatch with new ECG App

If you've been thinking about upgrading from a basic smartwatch, you're going to want to take advantage of Best Buy's offer for the Garmin Venu 2 Plus. This premium wearable device, which is originally priced at $450, is on sale with a $120 discount that knocks its price down to $330. There's no telling when its price returns to normal though, so if you want to get this smartwatch for much cheaper than usual, you'll have to complete your purchase of it as soon as you can.

Why you should buy the Garmin Venu 2 Plus
Garmin watches are known for their fitness-focused features, and the Garmin Venu 2 Plus continues the trend. The wearable device's Health Snapshot feature gives you an idea of your overall wellbeing, and the smartwatch can also provide Body Battery energy levels, sleep score and insights, stress tracking, ECG readings, and more. The Garmin Venu 2 Plus also offers 25 built-in indoor and GPS sports apps to record your workout data, as well as safety features such as Incident Detection and Assistance that will send your real-time location to your emergency contacts when necessary.

Read more