AT&T Inc.’s proposed purchase of T-Mobile USA Inc. will be under scrutiny by antitrust and communication agencies today, said a U.S. official.
On March 20, AT&T proposed buying Deutsche Telekom AG’s T-Mobile USA operations for $39 billion dollars. The deal would combine the No. 2 and No. 4 domestic carriers to create the market’s largest operator, ahead of current No. 1 Verizon Wireless. The deal has been approved by the board of directors at both companies but has yet to be approved by the U.S. government.
The merger between AT&T’s mobile operations and T-Mobile USA can only strengthen network assets for consumers, with AT&T Mobility committing to a significant expansion of LTE deployment. The company said it plans to reach about 95% of the U.S. population and expand services to an additional 46.5 million Americans in rural areas using the T-Mobile USA assets.
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, chairman and CEO of AT&T.
The acquisition also provides an efficient solution to the impending exhaustion of wireless spectrum. Stephenson added, “We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the president’s goals for a high-speed, wirelessly connected America.”
Of course, the merger will also create a de facto GSM monopoly in the United States.
AT&T has not yet officially submitted the purchase for agency approval, but in an interview with Bloomberg, an aide from the Federal Communications Commission says it will be forthcoming today.
The deal will face hearings in Congress and ultimately be approved or rejected by members of the FCC and the Justice Department.
FCC guidelines state the agency has 180 days to make a decision on the AT&T/T-Mobile USA deal. Another anonymous official said the agency isn’t limited to 180 days, and the deal would be decided as quickly as possible.
According to AT&T spokesman Michael Balmoris, the company plans to file its application around April 21.
In the event the deal falls through, AT&T will be forced to pay DT a $3 billion “break up fee,” along with forking over 1.7/2.1 GHz spectrum assets for its LTE deployment and a roaming agreement at a discounted price. Timo News obtained a copy of Deutsche Telekom’s press release, which reveals the company will receive $25 billion in cash and $14 billion in stock, giving it an 8% stake in AT&T if the deal is approved.
