October 25, 2014

AT&T accepts defeat, withdraws bid for T-Mobile USA

Victory!

Oh, what a glorious day (at least for T-Mobile users) it is! After more than eight months of court hearings, opposition from Sprint and the DOJ, and massive online protesting, AT&T and Deutsche Telekom have decided to drop the merger of AT&T and T-Mobile USA. Cue the celebrations! Now, AT&T must pay Deutsche Telekom the $4 billion as agreed in the contract, should the deal go south. Of course, what Deutsche Tekekom does with that money is entirely up to them. They may not even use it for T-Mobile USA, which is likely. DT has clearly expressed in the past that they have no interest in remaining in the U.S. market, so it’s possible that they’ll look for another buyer while using the $4 billion to beef up their European network. Only time will tell on that issue.

So what does this mean for T-Mobile? Well for the moment, it means Magenta customers can sleep a little easier tonight. Even with this defeat, T-Mo is not out of the woods yet. Many are pointing to a possible joint venture between AT&T and DT in the States.

Then again, we’ve been hearing whispers that Dish Network is interested in buying the company, which would vastly increase the amount of spectrum they have, and give them the ability to launch a wireless network on their own.

AT&T’s CEO Randall Stephenson had this to say about the failed merger:

AT&T will continue to be aggressive in leading the mobile Internet revolution. 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. 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.

So for the next few days (maybe until the New Year), nothing is set in stone. There are several likely scenarios that could occur, but we’ll just have to wait and see. If you’d like to see what Philip Humm, CEO of T-Mobile USA, had to say, you can read his full statement below.

Who’s happy that the AT&T-Mobile merger has finally come to an end? What do you hope happens to T-Mo from here? Sound off in the comments!

Source AndroidAndMe

 

[spoiler show="Philip Humm's Official Statement"]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.

[/spoiler]