In what would be one of the biggest deals since the financial crisis broke, the US telecoms giant AT&T has agreed to buy T-Mobile USA from Deutsche Telekom for $39bn (£24bn), creating the biggest mobile operator in the US.
The deal would bring together the second and third largest mobile groups in the US and will thus face intense regulatory scrutiny. If approved, the merger would shrink the number of major national wireless operators in the US to three from four.
Last May, telecoms regulator the Federal Communications Commission warned against growing concentration among mobile providers. The agency would have to approve the transfer of T-Mobile's spectrum licences to AT&T.
AT&T will pay $25bn in cash for T-Mobile USA and the rest in stock, giving T-Mobile's German parent an 8% stake in AT&T. The agreement has been approved by the boards of directors at both AT&T and Deutsche Telekom.
Together, AT&T and T-Mobile would have nearly 130m customers, about a third more than current market leader Verizon Wireless, a joint venture between the UK's Vodafone and Verizon. The combined firm would be more than twice the size of the third largest carrier, Sprint Nextel.
"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T chairman and chief executive. "It 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."
Deutsche Telekom chairman and chief executive René Obermann said: "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 US market."
In a press release, AT&T set out the argument it is likely to take to the regulators in favour of a merger. The firm claims the US wireless industry is "one of the most fiercely competitive markets in the world and will remain so after this deal. The US is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market. For example, in 18 of the top 20 US local markets, there are five or more providers." AT&T also argued that jointly the firms would provide a better wireless broadband service to rural areas, an Obama administration priority.
The combined company is expected to earn back the price of the deal in the next three years as it makes more money from customers and reduces costs by closing retail outlets and cutting back office, technical and call centre staff.
<url=http://www.guardian.co.uk/business/2011/mar/21/atandt-t-mobile-merger-us>Source
Just thought I'd gauge some reaction, cause I didnt see anything here about it. At least, not Thread Wise.
Personally... well, I'm Verizon, so this doesnt exactly bother me, but I'm sorta surprised it went through. The US likes to keep this stuff from happening because of Monopolies deals that Bell used to have. <url=http://www.kansascity.com/2011/03/21/2741932/sprint-shares-tumble-on-att-merger.html>Sprint's stock alone fell by 16% because of this. Though I dont see them lowering prices like they say they will.
So, thoughts Escapists? Particularly AT&T/T-Mobile Users, but anyone else too.
The deal would bring together the second and third largest mobile groups in the US and will thus face intense regulatory scrutiny. If approved, the merger would shrink the number of major national wireless operators in the US to three from four.
Last May, telecoms regulator the Federal Communications Commission warned against growing concentration among mobile providers. The agency would have to approve the transfer of T-Mobile's spectrum licences to AT&T.
AT&T will pay $25bn in cash for T-Mobile USA and the rest in stock, giving T-Mobile's German parent an 8% stake in AT&T. The agreement has been approved by the boards of directors at both AT&T and Deutsche Telekom.
Together, AT&T and T-Mobile would have nearly 130m customers, about a third more than current market leader Verizon Wireless, a joint venture between the UK's Vodafone and Verizon. The combined firm would be more than twice the size of the third largest carrier, Sprint Nextel.
"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T chairman and chief executive. "It 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."
Deutsche Telekom chairman and chief executive René Obermann said: "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 US market."
In a press release, AT&T set out the argument it is likely to take to the regulators in favour of a merger. The firm claims the US wireless industry is "one of the most fiercely competitive markets in the world and will remain so after this deal. The US is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market. For example, in 18 of the top 20 US local markets, there are five or more providers." AT&T also argued that jointly the firms would provide a better wireless broadband service to rural areas, an Obama administration priority.
The combined company is expected to earn back the price of the deal in the next three years as it makes more money from customers and reduces costs by closing retail outlets and cutting back office, technical and call centre staff.
<url=http://www.guardian.co.uk/business/2011/mar/21/atandt-t-mobile-merger-us>Source
Just thought I'd gauge some reaction, cause I didnt see anything here about it. At least, not Thread Wise.
Personally... well, I'm Verizon, so this doesnt exactly bother me, but I'm sorta surprised it went through. The US likes to keep this stuff from happening because of Monopolies deals that Bell used to have. <url=http://www.kansascity.com/2011/03/21/2741932/sprint-shares-tumble-on-att-merger.html>Sprint's stock alone fell by 16% because of this. Though I dont see them lowering prices like they say they will.
So, thoughts Escapists? Particularly AT&T/T-Mobile Users, but anyone else too.
