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AT&T ditches plans to purchase T-Mobile in wake of opposition

News by Dan Seifert on Monday December 19, 2011.

at&t · t-mobile · carrier news · dan seifert

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In a move that will surprise very few, AT&T has backed out of its plans to purchase T-Mobile due to the stiff opposition it has received from the federal government.

AT&T released a statement on the matter:
"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 has faced roadblock after roadblock ever since it announced plans to purchase T-Mobile for $39 billion earlier this spring. Apparently, the opposition from the government and pending lawsuits were just too much to keep the deal going. There have been rumors that AT&T would pursue a joint venture partnership with T-Mobile should the deal fall through, but there has been no official news on that front.

At this point it seems that T-Mobile USA partent Deutsche Telekom is set to receive roughly $6 billion worth of break-up compensation. AT&T had said last month that it was putting aside $4 billion in cash in preparation for that possibility.

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About the author

Dan Seifert
Dan is MobileBurn.com's Editor-in-Chief. Based in Poughkeepsie in New York, Dan can be found on Twitter as @DCSeifert.

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