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Well, so much for that. AT&T announced today that it and Deutsche Telekom have agreed to drop the proposed acquisition of T-Mobile by AT&T that was announced earlier this year. The news comes hot on the heels of a report that AT&T's attempts to sell off some T-Mobile assets in order to gain approval of the deal had stalled. As for what caused the decision, AT&T pointed to the FCC and Department of Justice's attempts to block the deal, adding that a combined AT&T-Mobile would've helped provide a temporary solution to a spectrum crunch. As a result of the merger's death, AT&T says, customers will be harmed. 

Now that the deal is dead, AT&T will be paying $4 billion to Deutsche Telekom, which consists of $3 billion in cash and $1 billion worth of spectrum. Additionally, AT&T has said that it'll enter a "mutually beneficial roaming agreement with Deutsche Telekom."

We heard rumblings late last night that AT&T was considering abandoning this deal altogether, but it's still kind of a surprise to see it actually happen. Still, things have been getting a tad hairy for the deal over the past few months as it kept running into new stumbling blocks, including an antitrust suit from the Justice Department and the possibility of an FCC hearing. It should be interesting to see where things go from here, as we've heard in the past that AT&T and Deutsche Telekom may be interested in forming a joint venture should the deal fall through. Additionally, the CEO of Dish Network has indicated that his company would be interested in merging its spectrum with T-Mobile's existing network. What'll end up happening is anyone's guess, but you can be sure that we'll keep you updated. In the mean time, AT&T's press release announcing the news is below.

UPDATE: Sprint, which has long been opposed to the AT&T/T-Mobile deal, issued a statement on today's news shortly after it broke. Unsurprisingly, Sprint is pretty pleased with AT&T and Deutsche Telekom's decision to abandon the acquisition, saying that "this is the right decision for consumers, competition and innovation in the wireless industry." Sprint added that it looks forward to competing in the "robust, competitive" wireless market and continuing to serve its customers in the future. The full statement from the Now Network is below.

Sprint statement on decision by AT&T and Deutsche Telekom to end bid to acquire T-Mobile USA

OVERLAND PARK, Kan. (BUSINESS WIRE), December 19, 2011 - Vonya B. McCann, senior vice president of Government Affairs for Sprint (NYSE: S), issued the following statement in response to AT&T’s decision to end its bid to takeover T-Mobile USA:

“Earlier today, AT&T terminated its definitive merger agreement with Deutsche Telekom to acquire T-Mobile USA. This is the right decision for consumers, competition and innovation in the wireless industry.

“From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T’s proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer.

“Sprint commends the Department of Justice, the Federal Communications Commission and the bi-partisan group of state attorneys general who gave voice to the concerns of consumers across the country. We look forward to competing fiercely in the robust, competitive market that exists today and continuing to deliver the world class service and products that consumers have come to expect from Sprint.”

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 53 million customers at the end of 3Q 2011 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The 2011 American Customer Satisfaction Index showed Sprint is the #1 most improved company in customer satisfaction, across all industries, over the last three years. Newsweek ranked Sprint No. 3 in its 2011 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

AT&T Ends Bid To Add Network Capacity Through T-Mobile USA Purchase

Company Reaffirms Its Commitment to Mobile Broadband Leadership

Dallas, Texas, December 19, 2011

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AT&T Inc. (NYSE: T) said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year.

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. 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.

“AT&T will continue to be aggressive in leading the mobile Internet revolution,” said Randall Stephenson, AT&T chairman and CEO.  “Over the past four years we have invested more in our networks than any other U.S. company. As a result, today we deliver best-in-class mobile broadband speeds – connecting smartphones, tablets and emerging devices at a record pace – and we are well under way with our nationwide 4G LTE deployment.

“To meet the needs of our customers, we will continue to invest,” Stephenson said. “However, adding capacity to meet these needs will require policymakers to do two things. First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC.  Second, policymakers should enact legislation to meet our nation’s longer-term spectrum needs.

“The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces,” Stephenson said.

To reflect the break-up considerations due Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the 4th quarter of 2011.  Additionally, AT&T will enter a mutually beneficial roaming agreement with Deutsche Telekom.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation’s fastest mobile broadband network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile broadband and emerging 4G capabilities, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verse® and AT&T | DIRECTV brands. The company’s suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com. This AT&T news release and other announcements are available at http://www.att.com/newsroom and as part of an RSS feed at www.att.com/rss. Or follow our news on Twitter at @ATT.

© 2011 AT&T Intellectual Property. All rights reserved. Mobile broadband not available in all areas. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

Via Wall Street Journal


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87 Reactions to this post

"The AT&T/T-Mobile deal is dead. Is that good or bad?"


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Aaron Latham Um... BAD!
Juan Garcia The main issue for T-Mobile now is what is going to happen, since DT no longer wants the US Branch. The first thing T-Mo needs to do with the $3 Billion cash it's receiving from Ma Bell is to get the iPhone on its network; NOW. Next; LTE.
David Lewis im happy the deal didnt work out for AT&T. cause if u remember when they bought out Cingular,they started raising the prices on there services.. for me im happy that the deal fell apart
Corey Artis @Sylbert Joseph: i don't think you understand. tmousa could be sold to any foreign telco and it would not be a problem. since dt does not want tmousa, i want someone who wants it. it could have been anyone except verizon or att and i do not think the informed or average tmousa customer would care who it was. as a tmo customer i am glad that att did not get us. i left att to go to tmo. and if another company wants to buy tmousa (except vodaphone, they own a big chunk of verizon) i could not care less.
Teron Facey I knew this deal wasn't gonna go thru and I'm not American. I think ATT are down right thieves.
Gabrielle Karl it's good,
Jason Matsukawa Damn good.
Emilie Mccloud Tmo & Dish Network r already talking, as a tmo employee I don't want to sell cable.
Gilbert Hernandez Jr. I wonder if David Stern blocked it.
Bill Moran So break it up and sell the pieces, its a good thing it failed
Tim Miyashiro Awful. I wish it went through
Rick Sievers So what... They both suck!
Patrick J OConnor Bad not a good idea at all
Micah Watkins Well now it's time for T-Mobile to cut a deal with Apple for the iPhone since they'll be around in the near future.
Shahid Khan Are you guys thick or sumthing? If you hav a contract with Tmob or At&t, then there will NO change to your prices or contracts! If they increase prices, then that breaks your contracts terms & conditions, means breach of contracts by them, wich means you can CANCEL your contract with & keep the handset = youve got a free phone! You Americans must wakeup & be more clever like us Europeans!! :-)
David Barris Jr Good they both suck.
Roger Schubert DeOliveira As a tmobile employee, FUCKKKKK, I just essentially lost my job, you know tmobile is over and done with right?
Mark Belkowski So glad this didnt go through.
Sylbert Joseph I don't think that t mobile customers realize what's going on here. DT can very well just decide that the company isn't worth keeping around, break it up and sell the pieces. It's only a matter of time. At&t should have stood firm on this deal. The only reason why sprint was so against this deal was the mere fact that it would be finished in standing against verizon and at&t. It's all about business. Not like they were fighting for the consumer.. Either way, just as long as we get the extra bandwidth, and don't pay more money, I'm a happy consumer.
Kevin Joel Perfect. Didn't want at&t's thieving dirty little hands allover my precious contract...
Julius Mawoussi That's too bad.
Tavaris Rashaun Johnson So good cus i love my unlimited plain and i know that was ginna go.
Justin Cartier Very good, competition will continue to keep prices down.
Norris Reber its funny to see the posts that say AT&T would have gotten cheaper, if it would have gone thru, most likely TMo would have gotten more expensive. Then there would have been more of a possibility that Sprint would have gotten bought out by someone, maybe Verizon, then there would only be 2 major HIGH cost carriers. NOT good for the consumer!!
Henry Murillo Hella good! Go tmo!!
Jamil Oquendo Also, I am not happy with the WP7 phone selection offered on T-Mobile, AT&T has the Titan and Focus S, we're stuck with the Radar and Nokia 710, wtf. I have an HD7 and I want a clear upgrade.
Matthew Lynn Lesley Bad for att and T-Mobile customers
John Zanatta Merry Christmas to all and to all a good night...
Walter Manuel Bonilla The best news I ever got.. Lol
Reese Woodson For those folks saying T-Mobile is better then AT&T, from my experience they are not. AT&T has way more coverage and a lot better phone selection. The only thing T-Mo has over AT&T is pricing and costumer service. DT (their parent company) doesn't even want them anymore. So what is T-Mo going to do now, just stay in limbo until another company buys them out?
Jamil Oquendo I kinda feel like i'm in limbo as a T-Mobile customer, we need answers asap!!! If they turn prepaid, i'm gone.
Gary Griffitts Good! AT&T sucks, customer service sucks, shady confusing billing practices, I will never use AT&T for anything.
NotYaj Onaicilef THANKS FOR THE $$$ AT&T!
Norris Reber well since it was blocked anyway, I don't think they had much choice, I guess they want to make it sound like it was their decision haha AT&T is a rip off carrier!! but then, they all r.......
Boey Peeperstine Its all about the money.
Hunter Messer Big mistake on their part. It would have been a hard merger but been worth it in the long run.
Janet Bey Glad it didn't happen
Fabiola Piña yay!!!! :D
José J. Landrau Ir couldn't be better!!!!
Trey Liggins It great!
Larry L Roe I say yes ATT is high a.f
Chris Corliss This is excellent news. AT&T already has a monopoly on land lines over most of the south and Midwest. FTC proves again to be one of the few competent government agencies.
Mario Arias Bad!! all the AT&T customers will see increased bills.
Norman Ford that's BS I and a lot of people in my market lost out jobs cuz of that ...cuz selfish managers staring looking out for themselves
Roy Portillo ITS GOOD!!! Two crappy companies wouldnt make it anyways. AT&T should have stayed in their hole.
Isaac E Gary Sprint and T-mobile should merge if tmobike willing to go unlimited data like sprint and merge with a plan. If not T-mobile can actually gain costomers by broadening there network they already got one of the fastest
Noe Zuniga Free markets work...good deal tmobile..
Matt Roe BAD now im still stuck with t-mobile service
Scott Ritchey Great news!!!!!!!!!!!!!!!!!!!!!!!!!!! ATT sucks
Anthony Bailey @Brian Johnson: You clearly have no clue was a "monopoly" is. YES, it would definitely would have been a monopoly ... between AT&T and Verizon. All of those other companies you mentioned, are irrelevant. AT&T and Verizon both have almost 100 million customers a piece. The next biggest carrier is Sprint, which barely has 50 million subscribers. T-Mobile has significantly less than that, and those other regional companies you listed, aren't even worth mentioning. None of those companies would have been able to compete against two mega-corporations, like AT&T/Verizon. #TheMoreYouKnow
Georgios Renieris I think it's a good thing the merger didn't happen but T Mobile is making out good in the deal don't they get like 600 million now.
Jozef Sakac They will just sell to someone else.
Firas Dabbas TMO will get cash and spectrum, the iPhone isnt big anymore as it used to be, the future looks bright for TMO again.
Cristian Henriquez If anything, t mobile would've been too expensive a month. Glad it didn't go through
Nicolas Flores Thank god that never happened. It would have been to see Sprint Merge with Tmobile
Luis Vega Great for all consumers , more fair choices to compete
Marquis Prettyboyswag bad because at&t would of got cheaper
Anthony Bailey YES! The feds FTW! Finally keeping America's best interest in mind. I knew this crap was dead in the water ages ago! I just didn't see it happening. This was de ja vu all over again. AT&T was broken up in the 90s for this same reason ... a massive mega-conglamorate monopoly. I don't see how AT&T thought this was going to fly, a decade later. As crappy as T-Mobile and Sprint (my cell provider) are, we need them to keep price competitiveness. If this AT&T/T-Mo merger had went through, it would have been disastrous for the consumer at-large. Don't be fooled to think otherwise.
Steve Hartsock John, you don't even know what you are talking about. At least AT&T has a nationwide network.
Morgan Hill Good . They need more competition among the carriers.
John Meinke its good at&t sucks
Brian Johnson it wouldn't have been a monopoly. -_- AT&T would've still had competition from Verizon, Sprint, Vergin Mobile, etc etc
Hector Portalatin Fuck Sprint! let Tmo stay how it is and the other carriers stay how they are everything is fine over here @ Tmo
Robert Ashman VICTORY!
Jesus G. Nolasco Good! No monopolys!!
Luis Hernandez AT&T customers say hello to higher prices
Jeremy Whitman Very good... I hate monopolys!
Cartez Cartizzle Sheppard Not T-Mobile should merge wit sprint
Antonio Miller Good, FOR ME
Brian Johnson UGH! wouldve been beneficial to ppl of both networks. more coverage and selection
Micah Madru It's extremely good, we don't need a GSM monopoly.
Baldus Maximus sucks for me as a tmobile customer, i wanted a bigger network
Steve Hartsock If you think T-Mobile is going to invest in their network now, you are crazy. It's parent company wants to offload it. Until that happens, it's going to stagnate. Good luck!
Sean Ryan Thank goodness! Whew!
Bill Thomas Very good deal
Hansel Starley Good, now get LTE please T-mobile.
Steve Hartsock I would have liked to seen the merger happen.
Fabu Lous FREAKING GOOD MAN
Andrew Olivares Not bad man, not bad




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