T-Mobile merger with AT&T done, but T-Mobile still wins

Wednesday, December 21st 2011. | Internet News

AT&T and T-Mobile logo

The merger between T-Mobile and AT&T was really all over the news for the most part of 2011.  The deal would have made the largest mobile carrier in the United States if AT&T was able to buy T-Mobile USA for a reported $39 billion.  This week, AT&T stepped away from the deal as regulators and many did not support the merger.  Even though T-Mobile subscribers would have gained a lot from the merger, including poor customer service, T-Mobile still came out ahead with a “record high breakup fee” the company imposed on AT&T.

After the deal collapsed under major pressure from all around, including government officials, T-Mobile set out to make sure they still got something for this year of waiting for nothing.  Today, reports say that T-Mobile got a deal worth $3 billion in cash and “a large package” of spectrum from AT&T.  At the same time, a long-term roaming agreement between the two mobile carriers was also agreed upon.  T-Mobile said that the deal with AT&T is “one of the highest payments ever agreed between two companies for the termination of a purchase agreement.”  They also went on to mention that even though the cash is nice, the extra spectrum in 128 markets is really what they wanted.

Both companies are in agreement that the broad opposition by the U.S. Department of Justice (DoJ) and the U.S. telecommunications regulator (FCC) is making it increasingly unlikely that the transaction will close. Both companies are of the opinion that important arguments in support of the transaction have been ignored, such as the significant improvement in high-speed mobile network coverage for the U.S. market, as well as the positive employment effects. In addition there was no indication that either authority would move away from its non-supportive stance in return for concessions from the parties in terms of the scope and structure of the transaction,” Deutsche Telekom, T-Mobile’s parent company said in a statement.

The spectrum that T-Mobile is set to receive is located in 12 of the top 20 markets in the country.  Those markets include Los Angeles, Dallas, Atlanta, Washington, Houston, Boston, San Francisco, Phoenix, Denver, San Diego, Baltimore and Seattle.  The roaming deal the two companies agreed on will help to fill in all the gaps in service across the country and reach well into rural areas.

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