The deal was jaw-dropping news when it was announced in March, but it wasn’t meant to be: AT&T just announced that it’s ending its $39 billion bid to buy Bellevue-based T-Mobile USA from Deutsche Telekom, after running into repeated regulatory roadblocks.
AT&T is striking a defiant tone even in defeat.
“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,” the company says in a statement announcing its decision. “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.”
It’s an expensive lesson for AT&T, which had already signaled plans to recognize a charge of $4 billion in the fourth quarter “to reflect the potential break up fees due Deutsche Telekom in the event the transaction does not receive regulatory approval.”
The U.S. Justice Department in August sued to block the deal, saying that “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.”
The big question now: What happens to T-Mobile? Among other things, it remains the only major U.S. wireless carrier that doesn’t sell Apple’s iPhone. The company’s financial results have been mixed, even as it took on a new “challenger” strategy, attempting to undercut its rivals on price.
Dish Network is among the companies rumored to be interested in a partnership with T-Mobile if the deal fell through, but the development only increases the uncertainty for T-Mobile and its employees.