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AT&T CALLS IT QUITS ON T-MOBILE TAKEOVER......


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AT&T bows to objections, drops bid for T-Mobile

 

Cellphone giant had faced fierce battle with federal regulators

 

 

AT&T is ending its $39 billion bid to buy T-Mobile USA, citing fierce government objections.

 

The Justice Department sued to block the merger Aug. 31, saying it would reduce competition and lead to higher prices.

 

Executives of the two wireless giants disagreed, but last month they took a step toward terminating the deal when they withdrew their application to the Federal Communications Commission after its chairman also opposed the merger.

 

AT&T maintained Monday that the wireless phone industry requires more airwave space to expand.

 

"The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage," the company said in a news release. "In the absence of such steps, customers will be harmed and needed investment will be stifled."

 

 

AT&T's purchase of T-Mobile from Deutsche Telekom of Germany would have made it the largest cellphone company in the United States. AT&T is the country's second-largest wireless carrier, while T-Mobile is the fourth-largest.

 

The decision was hailed by consumer advocates, who had warned that the merger would concentrate too much power in the hands of a single carrier.

 

 

 

 

The termination of the merger agreement will be a costly one for AT&T, which will take a pretax accounting charge of $4 billion in the current quarter to reflect a breakup fee it agreed to pay Deutsche Telekom.

 

 

 

 

 

REST OF THE STORY

 

 

 

 

 

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It is very likely that T-Mobile will depart the US market entirely. They first tried to sell to Sprint, but there were technical problems merging the two networks. They then tried AT&T, and the Government prevented it. Verizon doesn't really need the spectrum. T-mobile's parent company has been in limbo waiting on this deal, and will not likely now invest in a fourth generation network here.

 

It is still a two horse race between Verizon and AT&T. All that happened here was that the government chose Verizon as the winner, because AT&T will have to manage traffic by increasing prices on heavy users if it can't find another answer to it's need for additional bandwidth due to it's success with the I-phone.

 

So what the "consumer advocates" are really celebrating is a stronger Verizon and fewer consumer choices. Yay.

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It is very likely that T-Mobile will depart the US market entirely. They first tried to sell to Sprint, but there were technical problems merging the two networks. They then tried AT&T, and the Government prevented it. Verizon doesn't really need the spectrum. T-mobile's parent company has been in limbo waiting on this deal, and will not likely now invest in a fourth generation network here.

 

It is still a two horse race between Verizon and AT&T. All that happened here was that the government chose Verizon as the winner, because AT&T will have to manage traffic by increasing prices on heavy users if it can't find another answer to it's need for additional bandwidth due to it's success with the I-phone.

 

So what the "consumer advocates" are really celebrating is a stronger Verizon and fewer consumer choices. Yay.

 

 

But… But... But... I don't like AT&T and that should be more than enough to justify the government in preventing the merger.

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