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

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.'"

Comments

Perfect!

[Anonymous Coward]

Yay!

That means the T-Mobile commercials with that hot girl in pink will continue!

Re:Perfect!

[Anonymous Coward]

You're just saying that because you haven't seen the "Can you hear me now?" guy in a magenta miniskirt.

Re:Perfect!

[Anonymous Coward]

Now I have an image of James Earl Jones in a magenta miniskirt stuck in my head. Thanks a lot.

Holy Shit! The Solution to Global Warming!

[erroneus]

Hell just froze over. I am not sure I can sleep tonight.

Corporate Dead Pool 2012

[damn_registrars]

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.

Re:Corporate Dead Pool 2012

[Burdell]

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).

Re:Corporate Dead Pool 2012

[SpaceLifeForm]

Google should buy them.

Re:Corporate Dead Pool 2012

[Voyager529]

Their coverage might not be all that great in the middle of the desert like Verizon is, but I've got Verizon in one pocket (courtesy of work), and T-Mo in the other. In the New York suburb where I live, coverage is mostly comparable; places where T-Mo drops the call, my Verizon phone is showing less than -100dbm coverage itself. Also, while I've found Verizon to have a bit better latency numbers, my download speed on T-Mo 3G is sometimes double Verizon's numbers, likely due to the fact that there are relatively fewer people saturating the backhaul.

As for phones, fine, they don't have the iPhone officially. They do, however, unofficially support unlocked iPhone models on their network. T-Mobile has the Blackberry Torch now, though using a Blackberry as an example did cause a slight lol. They have more Android phones than anyone else, in more form factors, and if memory serves more WP7 phones as well.

While I unfortunately agree that T-Mo's future is questionable, I think that making it well known that they're officially not becoming AT&T will likely help spur sales. I knew a lot of people who were considering going to T-Mo, but didn't want to become AT&T customers. This may restore enough confidence to make the growth start happening for them.

Re:Corporate Dead Pool 2012

[Sipper]

Just FYI: Deutsche Telekom has outright told workers at T-Mobile that if the deal with AT&T fell through that they would seek another buyer to sell T-Mobile to. The impression is that they want to get out of the US market, but remain in the European market.

So..

[Lifyre]

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

Re:So..

[Demonantis]

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

Re:So..

[Anonymous Coward]

The New York Times had an even more informative article on this with the most likely reason -- if they continue with the FCC application, most of the records they filed for it become public, which the DOJ can then turn around and use against them in the antitrust suit. Quite likely, the horrific reality of all of AT&T's patently-false claims that were debunked months ago are spelled out in those filings and they don't want it getting out.

The attempt to withdraw the FCC application is essentially an admission that they know the deal has less than zero chance. Another interesting point in the NYT is that the FCC is under no obligation to honor their request. They can deny it and force it to judicial review, or grant the withdrawal with prejudice (meaning AT&T cannot refile the application later, which would absolutely kill the deal).

$4 Billion?

[Walking The Walk]

"4 Billion US dollars to cover accounting and other costs"

Just what kind of other costs could they have? $4B is an awful lot of hookers...

Re:$4 Billion?

[Bill Dimm]

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.

Re:$4 Billion?

[FooAtWFU]

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.

Re:$4 Billion?

[rabtech]

I don't think the issue is how big were their costs but why they paid $4B. The article makes it sound like they just felt bad for the company and decided to give them the $4B. But obviously it is some under the table payment for something rather substantial as $4B is like the yearly revenue of a giant multinational company.
It is not something that a company can just afford to give away or even write into a contract as a "if things don't work out" clause.

Merger deals almost always include a play-or-pay clause because all the discovery, legal work, etc has real costs to the target company... it prevents non-serious bidders or those who would bid to shake confidence in the company then back out. It also covers stuff like customer/employee impact (people leaving in anticipation of the merger) and any proprietary information the acquirer might have picked up during the due diligence process.

Didn't even know

[Fnord666]

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

I didn't even know T-Mobile was trying to merge with the FCC. How did AT&T stop it?

Good news

[macwhizkid]

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.

Re:Hell has Frozen Over 2x

[swalve]

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.

re-upping my contract with T-Mo

[xeno]

I've been with T-Mo for almost 15 years, and this is good news. Not great news -- I'm sure there will be more trouble for T-mo in some form or another -- but at least not this year, and probably not next. But you know what this does mean? I'm re-upping my contract with T-Mo. When T-Mo came calling last year (one of several "PLEEZ don't jump ship" themed customer retention campaigns) I told them desire to have a GSM phone was only trumped by a desire never to be an AT&T customer again. As long as the death star doesn't gobble them up, T-Mo can keep having my money.

Oh, and btw -- T-Mo coverage is more than adequate across the US & Canada, (Iirc I still don't have coverage in rural Neb and WY, but no trouble anywhere else), data services are cheap, and they actually have decent humans in the corp stores. T-Mo isn't making money hand over fist, but they're doing _ok_, and that's good. In these times, in this economy, I want to give my money to an org that's doing _ok_: neither going out of business, nor robbing me. You hear that, T-Mo? "Ok" and "staying in business without f__king your customers" is the new black. So keep on keeping on.