# The SBHonline Community Daily > Digerati Discussions! >  >  ATT to acquire T mobile

## BBT

News Alert
from The Wall Street Journal


AT&T Inc. has agreed to buy T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock, in a deal that would create an industry giant by combining the No. 2 and No. 4 U.S. wireless carriers.

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## andynap

Oh oh- I don't like that so much. I have a good no-contract price with T-Mobile that ATT doesn't have.

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## JEK

And the other GSM carrier in the US.

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## JEK

You need an iPhone anyway.

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## JEK

In The Race For More Spectrum, AT&T Is Acquiring T-Mobile For $39 Billion

1
As anyone who has read a tech blog in the past few years will know, AT&T has been under attack for not being able to match the network capacity of larger rival Verizon. And when they won the majority of the bids for the open spectrum in 2008, Verizon also had a clear path to the future. Now AT&T is taking another path: buying T-Mobile.

Heres the release with the details of the deal. AT&T will pay roughly $39 billion to Deutsche Telekom for T-Mobile USA. Deutsche Telekom will also get a roughly 8 percent ownership stake in AT&T as a result of the deal. And a Deutsche Telekom executive will join AT&Ts Board.

With the deal, AT&T will get access to T-Mobiles roughly 35 million customers. If the two fully merge, this will push AT&T far past Verizon in terms of subscriber numbers. Currently, Verizon has about 100 million subscribers in the U.S., while AT&T has about 95 million. This deal will also leave Sprint as the lone large outsider, with about 50 million subscribers.

The agreement has already been approved by both Boards, but obviously will have to pass government scrutiny.

Here are AT&T CEO Randall Stephensons key quotes from the release:

This transaction represents a major commitment to strengthen and expand critical infrastructure for our nations future. It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, Americas high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.

And:

This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. 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.

And heres Deutsche Telekom CEO René Obermann:

After evaluating strategic options for T-Mobile USA, I am confident that AT&T is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices. Also, the transaction returns significant value to Deutsche Telekom shareholders and allows us to retain exposure to the U.S. market.

Stephensons wording, and other wording in the release referencing President Obama seems to be a clear message that AT&T thinks this deal should get government approval. Heres the key blurb in that regard:

With this transaction, AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent 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 does not have a clear path to delivering LTE.

The rural communities and small towns wording is a big part of both the net neutrality and spectrum debate. AT&T wants to make it clear that theyre doing this for the little guys. Its a smart play, but whether or not it will work is another matter. Certainly, Verizon will have some things to say about this deal.

I*t also looks like T-Mobile customers may end up getting access to the iPhone after all* This commercial is certainly much more interesting now.

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## andynap

I just bought an Android. I don't mind having an iPhone- it's the contract and data plan I don't want.

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## JEK

I'm sure your contract will be grandfathered.

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## andynap

Funny- I don't have a contract.

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## JEK

Well, then your lack of contract will be grandfathered. At least for a month or two :)

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## BBT

Haha, the good news is more distribution for iPhone iPad

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## JEK

And lots more cell towers for AT&T.

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## Voosh

I use AT&T all over. No problem. Most "providers" skimp on towers and service. No "proper" stuff to cover their alleged service coverage. IMHO.

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## andynap

I think the title shold be:" ATT agrees to buy TMobile". Whether it acquires it is another thing- depends on regulatory approval which isn't guaranteed- I hope it doesn't go thru. I just got rid of ATT.

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## JEK

The biggest deal since the great recession will be approved. Plus it Americanizes a German entity.

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## Eddie

> ... it Americanizes a German entity.



We haven't done that since Marlene Dietrich.

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## JEK

T-Mobile USA customers shouldn't expect Apple's iPhone for at least 1 year

By Katie Marsal
Published: 09:15 AM EST

U.S. customers of T-Mobile likely will not have access to Apple's iPhone for at least one year, assuming a proposed acquisition from AT&T is granted federal approval.

Following the announcement on Sunday that AT&T plans to buy T-Mobile to create the largest wireless provider in the U.S., a list of frequently asked questions were posted on the official T-Mobile website. In that list, one question is specifically devoted to the iPhone, which is currently only available to AT&T and Verizon customers.

"T-Mobile USA remains an independent company," the FAQ reads. "The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4G."

T-Mobile cannot yet offer the iPhone because its wireless network is not compatible with the 3G radio found in the GSM version of Apple's best-selling smartphone. And that won't change until AT&T's proposed acquisition of T-Mobile is approved by federal regulators -- a milestone that is by no means guaranteed.

The merging of customer bases from AT&T and T-Mobile would create a total of about 130 million users, making AT&T the largest carrier in the U.S. AT&T has touted that the acquisition of T-Mobile will help to speed up its own existing nationwide network.

Though they operate on different radio frequencies, the networks of AT&T and T-Mobile have a common technology base with 3G UMTS. That will make it easier for AT&T to merge the two networks and ensure that handsets from both companies will be compatible on the same network.

T-Mobile's FAQ also notes that the acquisition will offer "significant benefits" for customers, improving network quality and boosting speeds.

"The merger will ensure the deployment of a robust 4G LTE network to 95% of the U.S. population, something neither company would achieve on its own," it reads. "Also, because of our compatible networks and spectrum, the customers of T-Mobile USA and AT&T will experience improved voice and data service almost immediately after the networks are integrated."

Customers were also advised that they should not wait to sign up with T-Mobile or upgrade their handset, as the company remains independent until the deal is approved. The company will also honor all contracted plans that are entered into before the change of ownership.

AT&T announced on Sunday its plans to acquire T-Mobile for $39 billion. The cash and stock deal, if approved, would give Deutsche Telekom, the owner of T-Mobile USA, an 8 percent stake in AT&T.

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## andynap

Monday, March 21, 2011
AT&T + T-mobile = Store closings; lower smartphone fees? (Update) 
AT&T's proposed $39 billion purchase of Deutsche Telecom's T-Mobile service would be good for AT&T and great for Verizon; but it will give phone users fewer choices, and probably higher prices, and that will make it tough to get past the Justice Department, Bernstein Research analyst Craig Moffett told clients in a report today.

The proposal pre-empts a would-be Sprint-T-Mobile combination, and just about forces Sprint to rely on new investments for its Comcast-backed partner, Clearwire (owner of the high-end Clear mobile service), if it wants to stay in business, Moffett adds. Excerpts:

"A T-Mobile/Sprint deal would have turned a four player market into a three player oligopoly, a very attractive outcome for Verizon.

"An AT&T/T-Mo deal turns a four player market into a de facto duopoly, an even more attractive outcome for Verizon," which may also be able to buy divested assets that AT&T sells to pay for the deal, on the cheap.

"The primary question, of course, is whether the deal can achieve regulatory approval."

Moffett runs the deal through Justice's crude Herfindahl-Hirschman Index for measuring market compensation (square the percentage market share of the combined company, subtract each square for the pre-merger partners, and compare the difference) shows "the deal would take a post-paid industry that is already highly concentrated (2800 HHI) up by 750 points, to 3,500. By revenues, the increase would be only slightly smaller, from 2600 to 3300."

The Justice Department shoots down two deals of this level of concentration, for every one it approves, Moffett warns. But: "Divestitures in key markets, particularly in the Mid-West, can be offered as a meaningful
concession."

And: "AT&T is already arguing that the deal advances key Obama Administration objectives. They are committing to 95% LTE coverage [improved service] as a door-opener. And they will argue that genuine spectrum constraints (well illustrated by AT&T's long and very public iPhone problems) can only be alleviated by a combination of spectrum assets like this one.

"They will also promise unionization of the entire combined wireless workforce in an appeal to Democrats who would otherwise be expected to be the deal's principal opponents.

"Moreover, the substantial cost synergies leave room for reduced consumer rates, something that they would likely be willing to promise as a regulatory condition."

So who's this bad for? Besides Sprint, "the implications are negative" for communications-towers owners; handset suppliers (who'd face "a more concentrated US market"); and satellite TV-mobile phone combinations, whose prospects "are now all but zero."

Writes David Strasser at Janney Capital Markets: "Consolidation from top four to three companies in the telecom space is not necessarily a good thing... It does
eliminate choice for consumers. However, consumers' buying decision has clearly shifted to the hardware, away from the carrier - so the impact will be somewhat minimal..."

That's the goal: "move T-Mobile customers to smart phones, which have higher monthly fees," as AT&T boss Randall Stephenson says in the press release. So "we should see an uptick in smartphone conversion" if the deal goes down as planned.

Bad news for retail salespeople and landlords: "There will be store closures."

It should take six months to a year for the Justice Department and FCC to review the deal with a "rigorous, extremely fact-intensive examination of the effect of the deal on consumers," and on local wireless competition, says Michael Weiner, co-chair of law firm Dechert's antitrust and competition group.

He says the business has been consolidating quickly, citing the purchases of Alltel and Rural Cellular by Verizon Wireless in recent years, and AT&T's purchase of Centennial Communications.  Philadelphia-based Comcast was also a major wireless-phone player in the 1990s, before it sold the low-profit business to concentrate on cable, Internet and video programming

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## NYCFred



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## JEK

Share
Thursday, March 24, 2011
AT&T has 'steep climb' ahead to get FCC approval of T-Mobile purchase

By Josh Ong
Published: 02:00 AM EST


According to an anonymous official at the Federal Communications Commission, AT&T faces a "steep climb" in convincing the chairman to approve its proposed purchase of T-Mobile USA.

The Wall Street Journal spoke with an FCC official, who declined to comment on the record, on Wednesday about the $39 billion deal from AT&T to acquire T-Mobile USA from parent company Deutsche Telekom. "There's no way the chairman's office rubber-stamps this transaction. It will be a steep climb to say the least," said the official.

However, an AT&T spokesperson responded optimistically to concerns that the deal could be held up by the Commission. "We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions," said spokesman Michael Balmoris. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."

According to the Journal's report, comments by FCC Chairman Julius Genachowski on Tuesday indicate the agency's commitment to encouraging a competitive marketplace. "While we're still working through details of a data-roaming framework, I believe the core proposition is beyond dispute: healthy competition produces greater innovation and investment, lower prices, and better service," Genachowski said.

However, Genachowski and other FCC commissioners have remained silent regarding the proposed acquisition, the report noted. In addition to an FCC review, the Justice Department will also evaluate the deal. According to a filing with the SEC, AT&T stands to lose $3 billion if the deal is broken up.

On Monday, U.S. Senator Amy Klobuchar called for the FCC and the Department of Justice to look into the proposed deal. "Although this deal may spark innovation in the wireless industry," Klobuchar wrote in a letter to the two agencies, "I remain concerned that increased concentration will, at the same time, lead to fewer choices, higher prices and reduced service for wireless consumers."

A FAQ posted to the T-Mobile website earlier this week noted that the acquisition could take as long as a year to receive approval, further forestalling the expected arrival of Apple's iPhone on the network.

Third-place U.S. carrier Sprint could stand the most to lose from the proposed deal. Earlier this week, comments from the network's executives at an industry conference suggested that the company's pricing and profitability would be affected if the acquisition were to go through in its current form.

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## Petri



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## JEK

Wow! That is crazy good.  :thumb up:   :thumb up:   :thumb up:   :thumb up:

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## BBT

Agree thanks for sharing the talent of these folks is amazing.  :thumb up:   :laugh:

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