This afternoon AT&T officially announced that they are dropping their plan to merge with T-Mobile USA for $39 billion and has agreed to pay a breakup fee of $4 billion to the German parent company Deutsche Telekom. AT&T has been pushing the merger for most of the year and had faced tough opposition from the FCC, DOJ, and the other major cell carriers. In addition to the $4 billion fee, AT&T will be entering into “a mutually beneficial roaming agreement with Deutsche Telekom”.
AT&T’s released statement announcing their decision took aim at the FCC and DOJ…
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.
While this marks the end of a possible AT&T – T-Mobile merger, Deutsche Telekom will more than likely still be looking for a way to sell of its US business. This was made very clear by the company before the proposed AT&T acquisition, and it appears that Dish Network has its sights set on a possible takeover.