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AT&T will owe T-Mobile $6 billion if merger fails

News by Dan Seifert on Friday May 13, 2011.

at&t · t-mobile · cell phone news · dan seifert

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Sources reporting to Reuters are claiming that AT&T will pay T-Mobile USA $6 billion worth of cash and assets if the proposed buyout does not go through.

The amount would be comprised of $3 billion in cash, $2 billion worth of spectrum, and a $1 billion roaming agreement. This high cancellation fee shows that AT&T is confident that the proposed $38 billion buyout of T-Mobile USA will get approved by the regulatory bodies. The fee is 15.4 percent of the purchase amount, a level that had previously been unheard of.

Analysts estimate that the $2 billion worth of spectrum that T-Mobile would receive if the deal fails would be worth about 10MHz of bandwidth, not enough for a full LTE roll out. A carrier usually looks for 20MHz to properly roll out LTE, as 10MHz is not enough to fully realize the potential of LTE's speeds. [via Reuters]

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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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