AT&T Drops $39 Billion Bid for T-Mobile USA
The company, which will absorb a $4 billion breakup fee, says federal regulators have harmed consumers with their objection to the merger.
After weeks of speculation, AT&T on Monday officially ended its effort to acquire T-Mobile USA from Deutsche Telekom AG, blaming overzealous government regulators whose objection to the deal will hurt consumers.
AT&T has been trying since March to acquire T-Mobile for $39 billion, though the Justice Department sued to kill the merger in August, and last month FCC chairman Julius Genachowski came out against the acquisition as well.
“The actions by the FCC and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry,” AT&T said Monday. “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,” the company added. “In the absence of such steps, customers will be harmed and needed investment will be stifled.”
AT&T will take a $4 billion charge in the fourth quarter “to reflect break-up considerations due Deutsche Telekom,” the company said Monday.
While regulators worried that the acquisition could lead to higher prices and fewer U.S. jobs, AT&T argued that it was necessary in order for it to increase its 4G wireless Internet access to 97 percent of the country, as opposed to about 80 percent today.
AT&T CEO Randall Stephenson, in fact, lectured the FCC and Justice Department officials Monday.
Adding mobile broadband capacity, he said, “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.”
Second, he said, “policymakers should enact legislation to meet our nation’s long-term spectrum needs.”
Genachowski, meanwhile, issued a statement reading: "The FCC is committed to ensuring a competitive mobile marketplace that drives innovation and investment, creates jobs and benefits consumers. This deal would have done the opposite. The U.S. mobile industry leads the world in mobile innovation, and we agree with AT&T that Congress should pass incentive auction legislation that will unleash new spectrum for mobile broadband."