AT&T Kills T-Mobile Acquisition Deal

Posted by at 4:29 pm on December 19, 2011

AT&T on Monday said it planned to drop its attempt to take over T-Mobile USA. Citing opposition from the Department of Justice and the Federal Communications Commission, it decided to enter a “mutually beneficial” roaming deal with T-Mobile to share each other’s capacity. AT&T would pay its promised $4 billion in combined breakup fees to T-Mobile in response to the failed deal.

AT&T said that the acquisition would have helped the wireless industry, and consumers, by allowing the company to continue building out its network and avoiding what it sees as a coming shortage of wireless airwaves, or spectrum, that companies believe is threatening the industry.

“The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage,” the company said in its statement. “In the absence of such steps, customers will be harmed and needed investment will be stifled.”

AT&T didn’t try to explain how the permanent elimination of a fourth major national carrier would be considered a stopgap.

Without the prospect of a deal, it instead asked the FCC to approve its acquisition of Qualcomm’s 700MHz space to boost its LTE network. Laws should also be in place to help address “longer-term” needs, AT&T asked.

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