AT&T says resistance futile, ends attempt to assimilate T-Mobile

AT&T says resistance futile, ends attempt to assimilate T-Mobile

AT&T has capitulated under Federal Communication Commission (FCC) and Department of Justice (DoJ) opposition and decided to abandon their efforts to merge with Deutsche Telekom's T-Mobile USA.

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 have to pay DT the $4 billion break-up fee, and press ahead with a roaming agreement.

So, how we feeling about this? Happy? Angry? Did the government just save us from an even smaller oligopoly of telco providers, or did they interfere with the natural course of capitalism. And what if anything does this mean for iPhone on T-Mobile?

Source: Street Insider

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

AT&T says resistance futile, ends attempt to assimilate T-Mobile


I just have a bad feeling that AT&T will use this as an excuse to raise rates again. Some of their previous statements kind of eluded to it happening if the acquisition didn't go through.

I don't think AT&T's decision on rates hinges on this acquisition. They will spin it anyway they want to.

  1. As we expand our network, it is important to us that we maintain the quality of service you have come to enjoy and expect.
  2. Due to the volume of traffic on our small network, it is important to us that we retain the same quality you have come to enjoy over the years.

This is pathetic!!! It's not a matter of capitalism, but rather what's best the consumers. This would have given millions of att customers a leg up in the coverage game. Effed up dudes.

AT&T didn't make donations to the right officials. T-Mobile is such a small carrier, it didn't make sense not to approve the acquisition other than just because. The benefit would have only gone to the consumer. Granted, because of their size T-Mo offers some pretty low priced services, but their network isn't getting any bigger. A buy out is the best thing that could happen to them and their investors.

Poor AT&T Thankfully Verizon decided to buy enough spectrum so they wouldn't have to gamble and hope the government would let them buy smaller companies to make up for it.

Way to go AT&T, you jsut squandered $4 billion plus whatever the lost revenue for that roaming agreement instead of investing that money into bring your infrastructure up to date. GG.

GSM fans just got hosed. They needed this merger.
CDMA technology (like Verizon & Sprint use) is outdated, slow, and not compatible for people who travel internationally. GSM is what 90% of the world uses.
But GSM coverage in the US is average at best, and every time a carrier tries to build more towers, people complain they are ugly and they don't want them in their neighborhoods.
So we're stuck with a ever expanding need for more coverage and capacity, but an unwillingness to allow the building we need.
Merging two GSM carriers would have expanded coverage for both AT&T and Tmobile customers without building anymore towers.
But crybaby Sprint can't compete on it's own merits like Verizon can, so they cried to mommy to squash the deal. Interesting that Verizon wasn't complaining as much as Sprint isn't it?
Plus, didn't the DOJ allow behemoth Verizon to buy out Alltel a few years ago and for Sprint to buy out Nextel?
Why is it OK for the biggest carrier in the country (Verizon) to merge with a competitor but not AT&T?

Cuz it will likely run sprint out of business and then there will only be 2 major providers (Verizon and AT&T) then they can both just agree on a price and keep it that way and all of us would get screwed overpaying for overpriced cell plans. Seriously, if u can't see that happening with this merger then u for issues

I dont understand this. But im happy cus at.t sucs. They slow down some people int-speed. Also when they bought 'cingular' they renew my contract automaticly when my contrac with 'cingular' it was about to end. Im sure they rober a lot a more peple. my provaider now is at.t and i do like it have unlimited plan and so far they havent slowed me down yet. But still i like that there are Options for other people to chose carriers.

That is possibly some of the most incoherent babbling that I have heard in quite some time. Congrats.

This is good news. The merger would have lead to the fall of sprint and possibly a Verizon take over. Then we would be stuck with the choice of 2 bloated carriers with crappy overpriced plans because we wouldn't have anywhere else to go. People at AT&T need to realize that they r overpaying for crap.

Why is AT&T forced to pay a "change of mind" fee when it's the government that got in the way of the deal? AT&T never changed their mind. They were stopped.

AT&T was not stopped. AT&T did not want to go through the process, because a lot of plans they wished to keep from competitors would come out, such as what their plans were for the newly acquired spectrum, biz plan with the additional stores/employees, etc etc. AT&T withdrew the submission when they saw the gov had serious hard questions to be answered. Thus AT&T pays the 4 billion (which is nothing compared to the 70+ billion they would have paid)

I don't see a difference. AT&T wanted to go through a merger, not a corporate exposing maneuver to please some nosy politicians. Let's say you want to enter a building, but the Landlords(who had nothing to do with this) suddenly show up and say you have to get naked and expose yourself to the onlookers, and maybe a few other hoops to jump through, before you can go in, shouldn't that create the opportunity for the entire plan to be quietly ended with no problems for any party?
But instead this is like you said "no" and then the Landlord forced you to pay a fee for getting to the door. It doesn't matter if it's a drop in the bucket, it's the simple fact they have to pay because the government got in the way.
Had the government not got in the way, the deal would've gone through without an issue. But they did so, they were "stopped"