Monday, December 19, 2011

AT&T Gives Up on T-Mobile

AT&T has officially dropped its plans to buy T-Mobile. AT&T said they are no longer seeking to purchase T-Mobile and are going to pay Deutsche Telekom a $4 Billion break-up fee. The FCC and the Justice Department have both shown their disapproval of this deal, and it looks like the pressure has caused Ma Bell to cave. 
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
It is still yet to be seen what AT&T will do with its spectrum problems it claimed was the driving force behind AT&T's efforts. However, I think that is only part of the story. They can get spectrum if that's all they wanted, but they wanted the customers with the spectrum. It is still yet to be seen if AT&T will pursue a joint venture with Deutsche Telekom. In my opinion, this is very good for consumers. AT&T can find the spectrum it needs elsewhere, and T-Mobile will remain a low cost force in the market. I will update if more info appears. 


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