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AT&T to Acquire T-Mobile USA – Sprint Suggest Regulators Must Look at the Deal

On March 20, AT&T announced a $39 billion acquisition of T-Mobile USA. In less than 24 hours almost every potential angle has already been covered at length. Both AT&T’s and Deutsche Telekom’s boards have already approved the deal.

With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95% of the U.S. population to reach an additional 46.5 million Americans beyond current plans — including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.” T-Mobile USA doesn’t have a clear path to delivering LTE.

AT&T and T-Mobile said that they expect regulatory review to take up to 12 months. As others have pointed out, both AT&T and T-Mobile expect the deal to be approved or they wouldn’t have done it. However if it gets blocked T-Mobile gets a $3 billion “kill fee” apparently.

Sprint said that the purchase would “dramatically alter” the market and suggested that regulators take a hard look at the deal.

“The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and FCC, would alter dramatically the structure of the communications industry,” Sprint said in a statement. “AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor.”

Meanwhile, at least one person on Capitol Hill is urging scrutiny of the deal. Democratic Senator Jay Rockefeller of West Virginia called on regulators to “leave no stone unturned” in their examination of the proposed merger.

“With every passing day, wireless services are becoming more and more important to the way we communicate,” he said in a statement. “So it is absolutely essential that both the DoJ and the FCC leave no stone unturned in determining what the impact of this combination is on the American people.”

Rockefeller also promised his Commerce Committee would be looking into the matter.

[Source: 1, 2]

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