AT&T Ends Bid for T-Mobile

AT&T and finally decided its attempted merger with T-Mobile was just not going to be allowed by the United States government:

US telecoms giant AT&T has said it will not pursue its $39bn bid to buy T-Mobile USA after running into fierce government objections.


AT&T has said it would include a $4bn charge in its fourth-quarter accounts to cover any potential compensation due if the deal does not go ahead.

AT&T agreed to buy T-Mobile USA from Deutsche Telekom in March, aiming to create the largest US wireless network.

While many T-Mobile customers are cheering I question whether or not this will allow T-Mobile to continue exiting. The bottom line is Deutsche Telekom is no longer interested in T-Mobile and is willing to break the subsidiary up and sell it in pieces if necessary. Likewise the $4 billion AT&T just payed for the failed merger goes to Deutsche Telekom, who may or may not invest it back into T-Mobile.

The merger also caused a great deal of damage to T-Mobile as it basically froze them in place. During the merger they did little or no network expansion that I’m aware of, obtained relatively few new phones, and now sit as the only carrier who doesn’t have the iPhone. If T-Mobile wants to remain relevant they have to play catchup for the last several months they did nothing while AT&T attempted to purchase the company. Overall the attempted merger may have caused irreversible damage to the fourth major carrier in the United States.

3 thoughts on “AT&T Ends Bid for T-Mobile”

  1. It doesn’t solve the real issue either which is T-Mobile doesn’t have enough spectrum for 4G period and AT&T is low on spectrum as well which is why they needed T-Mobile. Now factor in VZ just picked up additional spectrum while this whole thing was going down (and they already had more than AT&T) and it really puts both AT&T and Tmobile in a bad place. Maybe the guys at Republic Wireless have the right idea of just routing as much of the shit as possible over Wifi. I am hoping to get in on their beta next year as more slots open up. I think that is what my previous voip company that I worked for should have been doing (a combo voip wireless offering).

  2. This was not about spectrum. This was about getting one competitor in an already uncompetitive market, out of the market. I would recommend going to and read some of their articles. It’s quite enlightening. Just like Internet ISP’s, the cell industry is very uncompetitive. Sprint is basically a non-issue now so it’s just Verizon and AT&T. One of the reasons the government divested the Bell’s was to create a competitive landscape. Now that everyone has bought or merged themselves back into a few giant groups, we are right back where we started. If you don’t think this is the case, ask your mobile phone and ISP’s what your monthly cap is. In a competitive market, you probably wouldn’t have one…

    1. @Euphrates – I believe you’re mixing up government motive and AT&T motive. AT&T’s motive was to obtain T-Mobile’s spectrum because they do not have enough LTE spectrum themselves to do a full build-out. Unfortunately the way the FCC controls spectrum and doles it out makes it incredibly cost prohibitive to purchase. In order to obtain more spectrum companies have to bid billions upon billion of dollars, oftentimes it’s cheaper to purchase the companies that already hold licenses to use the spectrum you desire. This is also why newcomers rarely enter the cellular phone market, it simply costs too much due to FCC’s control over wireless spectrum.

      The government’s motive for not allow AT&T to purchase T-Mobile is likely due to AT&T not paying off the right bureaucrats. Government bodies expect something in return for give your company the go ahead on something, including granting plush lobbyist positions to former agency employees. My guess is AT&T hasn’t hired a former member of the FCC to be a lobbyist in far too long so the FCC isn’t inclined to grant any favorable rulings.

      If you don’t think this is the case, ask your mobile phone and ISP’s what your monthly cap is. In a competitive market, you probably wouldn’t have one…

      I’m on Comcast Business and therefore have no cap. But you are right, if the market was truly competitive we would likely not be facing bandwidth caps. Sadly government regulations make it practically impossible, due to compliance costs and previously mentioned spectrum costs, for a newcomer to enter the market. Various local governments have also ruled against new startups in favor of granting local monopolies to favored ISPs (is just like how Xcel Energy has a granted monopoly to provide power in the Twin Cities region). Without removing government from the equation we’re never going to have truly free markets, which will harm us greatly since competition will not be allowed to spread.

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