This unholy alliance was meant to boost AT&T past Verizon has the number one and sole GSM carrier in the United States.
AT&T's last attempt was to try and divest assets given the merger had come through. The Department of Justice continued their strong stance against the acquisition along with many of the other large carriers including Sprint.
The result is that AT&T will have to pay Deutsche Telekom $4 billion dollars in break-up fees. The amound will be made up of $3 billion in cash plus around $1 billion in spectrum. The two carriers will now agree to a roaming deal which allows devices on each network to work to work on each others.
AT&T's official press release follows:
AT&T Inc. (NYSE: T) 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.
Next up is T-Mobile CEO's announcement to their employees
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
We personally don't think this purchase would have benefited anyone other than AT&T. Remaining independent while sharing assets is probably best for customers on both networks.
Do you feel otherwise? Please share your thoughts in the comments section which follows.