The AT&T T-Mobile Deal Is Officially Dead

T-Mobile will still be sold off or picked apart.

Ironically, USA has also lost some money: Verizon is paying Uncle Sam $2.6 billion LESS due to the tax write-off gained by paying T0-Mobile. The USA is in dire financial straits, and losing $2.6 billion of tax.

4.0 billion gross (breakup fee) minus 1.4 billion net (net cost to Verizon) means 2.6 billion is being saved somewhere. Bingo! That's by paying Uncle Sam less. The tax write off. Isn't the U.S. in financial stress these days? The U.S. just got "cheated" out on 2.6 billion, didn't they?

Read this again: Verizon is paying a foreign company $2.6 billion instead of patriotically back to ourselves (as taxes that can pay for infrastructure or pay down debt, etc). Ouch.

Although this is probably preferable (pick the lesser poison) than pairing up with T-Mobile.

So a corollary of this happenings, is the taxation laws are at least a wee little bit screwy too -- needs a bit fixing there, don't most people agree?

Victory!!!!!

AT&T Inc. (NYSE: T) said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year.

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 will continue to be aggressive in leading the mobile Internet revolution,” said Randall Stephenson, AT&T chairman and CEO. “Over the past four years we have invested more in our networks than any other U.S. company. As a result, today we deliver best-in-class mobile broadband speeds – connecting smartphones, tablets and emerging devices at a record pace – and we are well under way with our nationwide 4G LTE deployment.

“To meet the needs of our customers, we will continue to invest,” Stephenson said. “However, adding capacity to meet these needs will require policymakers to do two things. First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC. Second, policymakers should enact legislation to meet our nation’s longer-term spectrum needs.

“The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces,” Stephenson said.

To reflect the break-up considerations due Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011. Additionally, AT&T will enter a mutually beneficial roaming agreement with Deutsche Telekom.

http://www.att.com/gen/press-room?pid=22146&cdvn=news&newsarticleid=33560&mapcode=corporate%7Cwireless-networks-general

By ANTON TROIANOVSKI

AT&T is pulling its $39 billion deal for T-Mobile USA in the face of antitrust opposition. Here's a rundown of what it means for customers.

Question: What if I'm an AT&T customer?

Answer: Nothing will change immediately. But in the coming years, AT&T--like just about every other carrier--will need to find a way to get access to more airwave frequencies to make sure it can support the surge of data traffic on its network. That was a problem the T-Mobile deal was supposed to solve. If AT&T isn't able to find another solution, higher prices and worse service quality could result.

For now, AT&T is likely to continue to manage customers' data use by charging heavy users more. AT&T will also look to improve network performance in heavy-usage markets like New York and Chicago by installing more antennas and building better connections between the antennas and the network's core. And while AT&T will need to pay T-Mobile's parent $3 billion in cash and $1 billion in spectrum assets to make up for the deal falling through, that won't be much of a hit to the company's books. AT&T reported $94 billion in revenue for the first nine months of 2011.

Q: What if I'm a T-Mobile customer?

A: There's a lot of uncertainty swirling around T-Mobile--most of all because its owner, Deutsche Telekom AG of Germany, has said it wants to exit the U.S. market. For now, expect T-Mobile to continue to compete strongly for value-conscious customers. The company is able to offer relatively cheap smartphone rate plans, and it's also been making a push to gain more customers who don't want to sign up for a two-year contract.

But in the longer term, T-Mobile faces serious challenges. The uncertainty of the AT&T deal left the company in limbo for nearly a year--a very long time in the fast-changing telecom industry. T-Mobile is now the only national carrier without the iPhone. And it doesn't have a plan in place to upgrade its network to the fourth-generation standard already being adopted at Verizon Wireless, AT&T, and Sprint Nextel Corp. To do that, T-Mobile will need an investment that Deutsche Telekom so far hasn't been willing to make.

Q: What if I'm with another carrier?

A: Expect the wireless industry to remain in flux. Of all the carriers, Verizon is the one with the clearest path forward: it has already built out its high-speed LTE network to cover 200 million Americans, and its purchase of spectrum from several cable companies recently gives it enough frequencies to allow its network capacity to grow for several years, analysts say.

For Sprint, which fought hard in Washington against the AT&T-T-Mobile merger, obstacles still loom--notably a tricky network upgrade, a complicated relationship with mobile-broadband provider Clearwire, and a very expensive bet on carrying the Apple iPhone. Smaller carriers such as MetroPCS Communications and Leap Wireless International, which runs the Cricket brand, are facing spectrum constraints as consumers move to data-guzzling smartphones.

Q: Why did the deal fall through?

A: AT&T orchestrated the rollout of the deal in March to push all the right buttons, promising consumers a faster network and policymakers an expansion of mobile broadband into more of rural America. Key interest groups and politicians came on board and expressed their support for the deal. But AT&T apparently didn't anticipate the depth of concern among regulators and antitrust enforcers about the increasing dominance of Verizon and AT&T in the wireless industry. And while AT&T said it expected the government to analyze wireless competition only by looking at local markets, the Justice Department focused on the national market--where the deal would have reduced the number of competitors to three from four.

Despite AT&T's public stance last spring and summer that the deal would be approved, things started falling apart in late August when the Justice Department sued to block the deal on antitrust grounds. In November, the FCC echoed the Justice Department's concerns, saying it would seek its own trial-like hearing that would take place after the end of the antitrust trial. In the end, the opposition in Washington proved intractable, and Deutsche Telekom and AT&T decided to walk away.

Q: Why did AT&T say this deal would help consumers?

A: AT&T has been pummeled by criticism of its network's performance, especially in dense urban areas. AT&T said buying T-Mobile for $39 billion was the fastest and surest way to solve that problem. The two companies' networks were complimentary, AT&T argued, because both used a technology standard called GSM--unlike Sprint, Verizon, MetroPCS, and Cricket, which all use another standard called CDMA. Combining their networks, AT&T and T-Mobile said, would mean better service for customers of both companies. AT&T also said the merger would allow it to build out its high-speed, next-generation network to cover 97% of the U.S. population--more coverage than it said it would be able to accomplish without the T-Mobile merger. As a result of AT&T's new infrastructure investment, as many as 96,000 jobs could be created, AT&T said.

Q: Why did the government say this deal would hurt customers?

A: Government officials poked holes in AT&T's arguments. Regulators at the Federal Communications Commission said AT&T could improve its network performance without buying its third-largest competitor, that competition from Verizon could force AT&T to build out its high-speed network to cover 97% of Americans, anyway, and that the merger was sure to result in job losses as AT&T sought to realize the "synergies" of combining with T-Mobile. But the biggest focus in Washington was on the competitive dynamics of the wireless industry. Both the Justice Department and the FCC said that T-Mobile was an important and innovative low-price competitor to Verizon and AT&T. If T-Mobile were to be gobbled up by AT&T, the agencies said, consumers would see higher prices and less innovation.

What are these payphone things you speak of?

Turn off your phone, pick up a good book, and leave the digital age behind us. Maybe like some sort of Butlerian Jihad. My books have never failed me due to Nor'easters, clogged circuits, or silly phone issues. What is this: a smartphone in every pot? I saw an elderly lady at the store the other day trying to steer her cart and talk on her phone. Wasn't working well for her or the people in her way. Then on the next aisle, she was texting someone blocking traffic for other shoppers. Where were we before the smartphone came along? I suppose we are at a point now in our society where no one can do without a smartphone. We must have mobile broadband...we must have it now! Jaysus!

Loss of face to face conversation was and still is a bad thing.

We've dehumanized communication as we knew it.

I'm too old school for this. Maybe it's time to get off the grid. Like John Denver sang, "Blow up your TV (smartphone), read it in the papers."

I ain't buying it.
ATT is buying time to regroup. It's dead for now but this is ATT.
They'll come back with something.