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AT&T Stops T-Mobile Merger Bid With the FCC

Posted by samzenpus on from the never-meant-to-be dept.

An anonymous reader writes Relationships are tough and it looks like AT&T and T-Mobile's has stopped before it even started. From the article: 'AT&T and T-Mobile have announced that they will remove their pending applications to the FCC for their merger bid. This comes after statements from the FCC chairman 'strongly opposing the merger'. In doing so, AT&T has agreed to pay T-Mobile 4 Billion US dollars to cover accounting and other costs that this may have caused. While AT&T would still like to merge, it is unlikely that they will gain antitrust clearance from the Department of Justice. It's the antitrust aspect that this is mostly about, in that AT&T has said that they want this move to free up the FCC to consider all options, and focus both AT&T and T-Mobile on the pending antitrust.'"

13 of 169 comments (clear)

  1. Corporate Dead Pool 2012 by damn_registrars · · Score: 4, Insightful

    T-Mobile is now officially my #1 entry. Deutsche Telekom was looking to get rid of them, and I don't see them being likely to hold in there very long without them.

    --
    Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
    1. Re:Corporate Dead Pool 2012 by Burdell · · Score: 5, Insightful

      I expect T-Mobile will still be sold, just not to another major mobile phone provider. I wouldn't be surprised if CenturyLink ends up buying them; they are the largest telecom company without a mobile presence.

      There's too many customers and too much spectrum for them to just be shut down. They're even still showing growth, just not as much as AT&T and Verizon (and not as much as Deutsche Telekom would like).

    2. Re:Corporate Dead Pool 2012 by damn_registrars · · Score: 2, Insightful

      I expect T-Mobile will still be sold, just not to another major mobile phone provider.

      I disagree. I think T-Mobile has reached a state of corporate radioactivity. Their coverage is mediocre, their pricing is nothing extraordinary. and they have the worst phones of any major US carrier.

      T-Mobile is the only major carrier in the US who does not carry the iPhone (as just one example). T-Mobile hasn't had a new BlackBerry phone in a very, very, long time (as another example). If they can't get phone manufacturers to believe in them, how will they get a potential investor to? They have one foot in the grave already and there is nobody looking to throw them a line.

      There's too many customers and too much spectrum for them to just be shut down.

      Too many customers is not a valid reason for a company to stick around. T-Mobile customers will just become prey for the remaining carriers. They'll be in liquidation before 3Q 2012 and AT&T will be buying up their towers in cities where they want to increase their coverage. The rest of their towers will become roosts for birds.

      They're even still showing growth

      Any idiot can grow a cell phone company right now. Teenagers are viewing phones as a right-of-passage in this country today, and kids younger than them are getting them at an alarming rate as well. That is new customers coming in off the street without having to do anything at all, and as long as text messages stay expensive the providers have a gold mine by way of all those kids.

      --
      Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
    3. Re:Corporate Dead Pool 2012 by garyebickford · · Score: 2, Insightful

      Those customers are worth between $250 (the costs cell companies are now paying to acquire each new customer) and $500 (a reasonable one-year follow-on profit per customer) each to another provider - but none of the Big Three can now touch T-Mobile. So it's going to be a new entrant. T-Mobile is an excellent way to buy into the US market for someone with the balls and the resources to do it.

      If they had another few $billion they could build out their network as the best nationwide 4G, and expand their customer base with ridiculous incentives. (Just for instance, imagine a network so good that they could support their entire customer base with full-time streaming, 24 hours, no limits. Overkill? I don't know. It's just an example.) If they can manage to do all that, and grow fast but not so fast that they lose the great customer service that they used to have (and I hope they still have - I had to leave T-Mobile several years ago for work reasons), they could be a major player.

      --
      It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
  2. So.. by Lifyre · · Score: 3, Insightful

    Does this mean the merger is officially dead or is it just the first step in ending the merger? The article gave me the impression that the merger was still happening, kinda, but not with the FCC.

    -Sean

    --
    I'll meet you at the intersection of "Should be" and "Reality"
    1. Re:So.. by Demonantis · · Score: 4, Insightful

      At&t is still pursuing through the DOJ. They are probably dropping the FCC application since it won't go through and they can wait until the DOJ review goes through. I think they are dropping FCC application so if the DOJ passes it they can argue that the FCC should follow suit and any of FCC's arguments would become weaker as the DOJ didn't have a problem. Wall Street Journal has a more informative article. According to it T-mobile is not doing so hot and the parent company is interested in exiting the US market. http://online.wsj.com/article/SB10001424052970204452104577057482069627186.html

  3. Good news by macwhizkid · · Score: 5, Insightful

    Gee, it's almost enough to make you believe that regulators can do their job once in a while. Maybe the FCC can run training seminars for the SEC...

    Regardless, it's the right decision. Mergers of this scale are bad for everyone except one of the two CEOs. One guy gets a promotion. Meanwhile customers lose choice, the market loses competition, employees lose jobs (when they become redundant), and shareholders lose their investment (when half get bought out).

    And that's before you factor in the (rightly) indignant T-Mobile customers, most of whom have sworn a solemn oath to do business with anyone but AT&T.

    1. Re:Good news by Anonymous Coward · · Score: 2, Insightful

      That, and T-Mobile is the only competition to AT&T in the GSM/SIM enabled arena in the United States, and also the single least screw-the-customer-over-prone provider in terms of billing, plans, customer service, etc. in the country. Merging with AT&T will eliminate that competition, with the incentive for T-Mobile to be "better than AT&T" I can guarantee you the customer service would instantly become AT&T style and not T-Mobile style.

      T-Mobile has been the provider of choice in my area for a long time ever since Cingular was absorbed by AT&T and the service Cingular users were used to instantly went down the tubes... People around here buy loads of basic GSM/SIM phones on eBay, from Asia/Europe/Wherever for cheap to replace their lost, abused, worn our, flaky, stolen, or otherwise incapacitated contract phones and just swap the SIM card over. Under Verizon, Sprint, and all the other carriers with a legacy of CDMA you can't do that. You're lucky if you can convince Verizon to sell you a new phone without restarting another 2 year hitch on your contract, let alone activate another compatible phone that someone didn't buy (and pay off) from them at some point.

  4. Re:$4 Billion? by Bill+Dimm · · Score: 4, Insightful

    T-mobile may have lost a bunch of potential customers while the merger was pending, i.e. anyone that hates AT&T would be very reluctant to to sign a phone contract with T-mobile knowing they would be stuck with AT&T if the deal went through.

  5. Not giving up, just concentrating on DoJ for now. by Sarusa · · Score: 2, Insightful

    AT&T figures it should bring the full weight of bribes and lobbying to bear on one agency at a time... so they're starting with the DoJ. After they knock that off, then they can concentrate on the FCC.

    They're still in a bad position here that they didn't expect to be in, so I guess Verizon and Sprint had some pretty good counter-bribes under the table. The merger's in serious trouble at this point. To the bribe-mobile!

  6. Re:$4 Billion? by FooAtWFU · · Score: 3, Insightful

    On the contrary. It's exactly the sort of thing which would be written into a contract. For something similar, look at the recent war between HP and Dell over 3Par; Dell ended up being paid $72 million when they took the HP bid. This is a little more extreme, but then again, ATT is a $163 billion company.

    --
    The World Wide Web is dying. Soon, we shall have only the Internet.
  7. Re:Finally some conclusion by Anonymous Coward · · Score: 2, Insightful

    This isn't a conclusion. The DOJ is still reviewing the proposal. AT&T only retracted their application to the FCC. They can re-apply if they feel it is appropriate, i.e. if the DOJ gives their nod.

  8. Re:Hell has Frozen Over 2x by swalve · · Score: 4, Insightful

    The bell breakup was stupid. Decouple Bell Long Distance from Bell Local Service, yes. But break up Bell into SBC and Illinois Bell and Mid Atlantic Bell and all of that was asinine. It makes no goddamned difference to the consumer how big the company is when they have no other choice for their dialtone service.