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Mergers & acquisitions

AT&T Withdraws T-Mobile Merger Application

AT&T Inc. (NYSE: T) and Deutsche Telekom AG (NYSE: DT) said Thursday they have withdrawn their applications for Federal Communications Commission (FCC) approval of the AT&T/T-Mobile US Inc. merger, but intend to re-file at a later date.

The Thanksgiving surprise is a reaction to the FCC's confirmation Tuesday that it will hold an administrative meeting on the proposed merger.

AT&T and DT say -- in a statement -- that they are continuing to pursue the sale of T-Mobile USA to AT&T "and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice" through the pending litigation or other means.

"As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval," the statement says.

As a result, AT&T expects to recognize a pre-tax accounting charge of US$4 billion -- $3 billion cash and $1 billion book value of spectrum -- in the fourth quarter of 2011 to reflect the potential break up fees due to Deutsche Telekom in the event that the transaction does not receive regulatory approval.

Why this matters
The withdrawal of FCC approvals will add months to the acquisition process at the very least. All-in-all, the prospects for the $39 billion buyout are looking bleaker as we head deeper into the winter.

For more
See all the latest wranglings in the AT&T/T-Mobile case below and read all our coverage here:





— Dan Jones, Site Editor, Light Reading Mobile

joset01 12/5/2012 | 4:47:53 PM
re: AT&T Withdraws T-Mobile Merger Application

Interesting point! And, yes, I think -- as do most analysts -- that there's little chance that AT&T will get this deal done in anything like its current form.

MMQoS 12/5/2012 | 4:47:53 PM
re: AT&T Withdraws T-Mobile Merger Application

From the story: "the prospects for the $39 billion buyout are looking bleaker"


If this is true this would seem to be a major blow to the att residential broadband strategy to acquire rather than invest in infrastructure (including wireline).  


It is my opinion that att was counting heavily on the "T" access point site location/leases to 1) help them alleviate their dropped call problems but more strategically 2) to provide them coverage for residential video service via a combo of MiMo WiFi and 4G as their xDSL b/w tops out.  


Interestingly and maybe coincidentally they have made a proposal to my city for a DAS (Distributed Antenna System) antenna grid mounted on top of utility poles.  This proposal has met with very strong objections from residents who don't want wireless (read EMI) antennas located next to their 2nd story windows and may therefore be rejected.


Will they return to an FTTH strategy?  Probably not, at least not as long as Stephenson is CEO but Comcast Xfinity does have a hilarious ad showing uVerse all tied up in tangles of UTP wiring. 


 

kaps 12/5/2012 | 4:47:49 PM
re: AT&T Withdraws T-Mobile Merger Application

MMQoS, can you tell us the town that AT&T is trying to DASzle? It's not Palo Alto, is it?


Also, on the T-Mob deal getting done... it may look bleak for AT&T but with their power to move cash into legislators' pockets I would not count them out of anything DC-related. It may take another 2-3 years but that is the game AT&T plays. Long term. And there is a Presidential election next year. Just sayin' this one ain't over until AT&T says it is.

kaps 12/5/2012 | 4:47:49 PM
re: AT&T Withdraws T-Mobile Merger Application

MMQoS, can you tell us the town that AT&T is trying to DASzle? It's not Palo Alto, is it?


Also, on the T-Mob deal getting done... it may look bleak for AT&T but with their power to move cash into legislators' pockets I would not count them out of anything DC-related. It may take another 2-3 years but that is the game AT&T plays. Long term. And there is a Presidential election next year. Just sayin' this one ain't over until AT&T says it is.

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