AT&T to Buy T-Mobile USA for $39B
Under the terms of the deal, AT&T will pay $25 billion in cash and the remainder in stock for T-Mobile, giving Deutsche Telecom an 8 percent stake in AT&T and a seat on its board. Both operators' boards have approved the deal. The major sticking point for the buyout is likely to be U.S. regulatory approval. The acquisition would add nearly 34 million customers to AT&T's books, giving it close to 130 million users and handily beating the next largest carrier, Verizon Wireless , which has over 94 million subs.
It is not yet clear how authorities will react to the deal. AT&T and DT say it could take up to a year to close the acquisition.
For its part, however, AT&T is not being shy in pointing out what it perceives as the benefits of the acquisition to the U.S. populace:
AT&T said, in a statement, that it is planning a "significant expansion" of robust LTE deployment to 95 percent of the U.S. population with plans to reach an additional 46.5 million Americans beyond current plans -- including rural communities and small towns.
This, the company says, will help to achieve the Federal Communications Commission (FCC) and President Obama's goals to connect "every part of America to the digital age." AT&T expects to spend $8 billion on additional network development.
Buying out T-Mobile, however, should give AT&T additional capacity benefits in the short to medium term, as well benefits for its 3G network. The operators currently use compatible GSM 3G technology but on slightly different radio frequencies.
For instance, AT&T's 3G iPhone users can now potentially crack their devices to run on T-Mobile, but they are only capable of running on the older EDGE network on T-Mobile. It should be relatively simple, however, for the next generation of AT&T phones to support the relevant advanced wireless spectrum (AWS) frequencies used by T-Mobile.
T-Mobile, meanwhile, is planning to upgrade much of its current network to 42Mbit/s-capable 3G this year. The operator, however, had no obvious route to deploy 4G LTE because it lacked the spectrum. The path now becomes clear with an AT&T buyout.
The big loser in the deal could be Sprint Corp. (NYSE: S) as it was also rumored to be interested in a merger or network-sharing deal with T-Mobile. This may now have been trumped by AT&T.
— Dan Jones, Site Editor, Light Reading Mobile