AddThis Social Bookmark Button
Free Dating

AT&T to acquire T-Mobile for 39 billion

posted 3/22/2011 1:38:59 AM |
0 kudosgive kudos what's this?
    report abuse
tagged: news, business, cell phones, straddle

I saw this in the business news tonight and thought that this would be interesting enough to share.

NEW YORK – AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S.

The deal would reduce the number of wireless carriers with national coverage from four to three, and is sure to face close regulatory scrutiny. It also removes a potential partner for Sprint Nextel Corp., the struggling No. 3 carrier, which had been in talks to combine with T-Mobile USA, according to Wall Street Journal reports.

AT&T is now the country's second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless' 102 million. The combined company would serve about 43 percent of U.S. cellphones.

For T-Mobile USA's 33.7 million subscribers, the news doesn't immediately change anything. Because of the long regulatory process, AT&T expects the acquisition to take a year to close. But when and if it closes, T-Mobile USA customers would get access to AT&T's phone line-up, including the iPhone.

The effect of reduced competition in the cellphone industry is harder to fathom. Public interest group Public Knowledge said that eliminating one of the four national phone carriers would be "unthinkable."

"We know the results of arrangements like this — higher prices, fewer choices, less innovation," said Public Knowledge president Gigi Sohn, in a statement.

T-Mobile has relatively cheap service plans compared with AT&T, particularly when comparing the kind that don't come with a two-year contract. AT&T CEO Randall Stephenson said one of the goals of the acquisition would be to move T-Mobile customers to smart phones, which have higher monthly fees. AT&T "will look hard" at keeping T-Mobile's no-contract plans, he said.

AT&T's general counsel, Wayne Watts, said the cellphone business is "an incredibly competitive market," with five or more carriers in most major cities. He pointed out that prices have declined in the past decade, even as the industry has consolidated. In the most recent mega-deal, Verizon Wireless bought No. 5 carrier Alltel for $5.9 billion in 2009.

Stifel Nicolaus analyst Rebecca Arbogast said the deal will face a tough review by the Federal Communications Commission and the Justice Department. She expects them to look market-by-market at whether the deal will harm competition. Even if regulators approve the acquisition, she added, they are likely to require AT&T to sell off parts of its business or T-Mobile's business. Verizon had to sell off substantial service areas to get clearance for the Alltel acquisition.

To mollify regulators, AT&T said in a statement Sunday that it would spend an additional $8 billion to expand ultrafast wireless broadband into rural areas. Instead of covering about 80 percent of the U.S. population with its so-called Long Term Evolution, or LTE network, AT&T's new goal would be 95 percent, it said. That means blanketing an additional area 4.5 times the size of Texas. The network is scheduled to go live in a few areas this summer, but the full build-out will take years.

The offer would help the FCC and the Obama administration meet their stated goals of bringing high-speed Internet access to all Americans. They see wireless networks as critical to meeting that goal — particularly in rural areas where it does not make economic sense to build landline networks.

AT&T said its customers would benefit from the cell towers and wireless spectrum the deal would bring. In some areas, it would add 30 percent more capacity, AT&T said.

"It obviously will have a significant impact in terms of dropped calls and network performance," Stephenson said.

AT&T would pay about $25 billion in cash to Deutsche Telekom, Germany's largest phone company, and stock that is equivalent to an 8 percent stake in AT&T. Deutsche Telekom would get one seat on AT&T's board.

Like Sprint, T-Mobile has been struggling to compete with much larger rivals AT&T and Verizon Wireless, and its revenue has been largely flat for three years. Bellevue, Wash.-based T-Mobile USA's subscriber count has stalled at just under 34 million, though it posts consistent profits.

Deutsche Telekom has been looking at radical moves to let it get more value out of its U.S. holding, including a possible combination with a U.S. partner.

There was a big hurdle to a T-Mobile USA-Sprint deal: The two companies use incompatible network technologies. The same hurdle would apply in a Verizon Wireless-T-Mobile USA deal. But the networks of AT&T and T-Mobile use the same underlying technology, so to some large extent, AT&T phones can already use T-Mobile's network, and vice versa.

The deal has been approved by the boards of both companies. Dallas-based AT&T can increase its cash portion by up to $4.2 billion, with a reduction in the stock component, as long as Deutsche Telekom receives at least a 5 percent equity ownership interest in the buyer.

The agreement doesn't leave room for other buyers to jump in with a higher bid, AT&T said.

AT&T would finance the cash part of the deal with new debt and cash on its balance sheet and will assume no debt from T-Mobile.

By PETER SVENSSON, AP Technology Writer Peter Svensson, Ap Technology Writer

*If you have a cell phone, who is your provider?*

I have AT&T

Copy & paste to friend: (Click inside box; Ctrl + C to copy; Ctrl + V to paste)

   read more blogs!

Blogs by StraddleMyNose:
New Law Would Allow Texas Teachers to View Students' Criminal Records
Wisconsin Gov. Walker Wins!
Are you for or against traffic cameras?
Which of these 5 teams would you like to see in L.A.?
Ya gotta love a dad like
Ya gotta check out this composite sketch of this guy
Should you have a right to carry a gun inside bars?
The Movie Game blog
Would the new pink (salmon) color driver's licenses bother you?
Do you think Donald Trump would make a good president?
My REDS are 3-0
Cavity search of woman yields 54 bags of heroin, $50 in cash, and loose change
AT&T to acquire T-Mobile for 39 billion
To you, what's the best/worst car today? What was the best/worst 30 years ago?
Who do you think is going to win the NCAA basketball title this year?
What are your top 3 Jodie Foster movies?
Lemon (Citrus) is a miraculous product that kills cancer cells
Kid body slams little twirp that was picking on him
Name a movie/tv show with the character's name in the title
5 Things you never knew about the video game Pac-Man
Which way is your preference on how to spell Gaddafi?
Name a movie or tv show with the word family and/or friend(s) in it's title
Can you name a movie or tv show with a color in it's title
Can you name a movie or a tv show that has a number in it's title?
Freshman expelled for firing spitballs


post a comment!


Mar 22 @ 8:06AM  
What? So what you're saying is that all this 2012 doomsday predictions ...that they've only applied to t-mobile customers all along? Mayans were smarter than we thought.

Mar 22 @ 9:08AM  
Just think..Back in cell's infancy in '85, I could have bought in to a southern California up and coming cell system for a mere 100 Grand

Mar 22 @ 9:26AM  

*If you have a cell phone, who is your provider?*

Since I don't need all the fancy stuff with the cell phone like web browsing,checking email (that's what my computer is for! ) my cell phone service is through tracfone. Yep, the ole "pay as you go". And the phone I've got has the "double the minutes for the life of the phone", I buy a 60 minute card, I get 120 minutes. Suits me just fine. I don't chat on the phone much, so I don't unlimited minutes/texting. Although...I do admit, getting a hold of a smart phone/droid would be cool!

As for AT&T buying T-Mobile....all I see from that is higher fees and costs. I do have my internet and land line phone through AT&T.

Mar 22 @ 10:39AM  
3 comments and 187 views? Hey!!! Quit hogging my views!!!!

Mar 22 @ 11:15AM  
Long story short:

For much of its history, AT&T and its Bell System functioned as a legally sanctioned, regulated monopoly- with a little help from Unky Sam beginning around 1910- (not quite old enough to remember that).

Then in 1982, Unky Sam filed an anti-trust suit against AT&T and its Bell system to break it up (that Unky Sam, you never know what it's going to do but... then, neither do they) and the results are as you see it now!

AT&T would love to be king ruler again!


Mar 22 @ 11:23AM  
Oh, forgot- I've been using Verizon for about 11/12 years now and have always been happy with their service- never had dropped calls and always was able to connect- people are courteous and changing your plan is done with a phone call to them with free phone time to make changes!


Mar 22 @ 12:38PM  
I now have Verizon. I had Alltel for about 13 years and switched last Sept.

Griz has T-Mobile and we looked into just putting me on his account when I was up there last fall, but most of the areas that I would need it in while traveling back and forth to Mn aren't covered. Nor is the area I live in.
Good idea for about a minute.....

I wonder what kind of changes this will make for him.... and his daughters, as they also have T-Mobile.

Mar 22 @ 1:07PM  
Then in 1982, Unky Sam filed an anti-trust suit against AT&T and its Bell system to break it up (that Unky Sam, you never know what it's going to do but... then, neither do they) and the results are as you see it now!

Yeah, much cheaper phone service, especially long distance. They had us by the nuts until deregulation.

Mar 22 @ 1:43PM  
I started out with a Cricket phone and stayed with them for a couple of years. Then I switched to Cingular (now AT&T). When I moved to Arizona, my Cingular worked but the roaming charges were eating me up so I switched to T-Mobile. I stayed with T-Mobil when I moved to Oklahoma even tho the service wasn't quite as good. A buddy and I went on AT&T and I have been on it ever since. My home phone, cell phone, tv service, and internet are all AT&T and highly satisfied with all of them.

Mar 22 @ 4:44PM  
I started out way back in the early 1990s with MCI. Switched to AT&T a bit later in the 90s, they I switched to Sprint which was a BIG mistake. Finally got smart and changed to Verizon and I'm a happy camper. I love my smart phone, but you are locked into a fairly hefty monthly fee for a data package. If you don's use it for email, surfing the web, GPS, texting, etc. it's a waste of money. So, if you are on a tight budget I do not recommend a smart phone (iPhone, Droid, Blackberry, etc), but they are cool.

Mar 22 @ 4:56PM  
One nice thing about being old..
I have Safelink, started out with 600 minutes and they add 125 minutes a month and it's free..
For internet I have CenturyLink and get 17 bucks amonth off that !!!!

Mar 22 @ 7:39PM  
Bell Atlantic merged with GTE on June 30, 2000 and changed its name to Verizon Communications Inc.

Now there is irony... the possibly soon to be two largest wireless companies in the US were both once the same apart of the same company... AT&T.

So the only question now, is which Bell company do you want to hand your money to?

Mar 24 @ 11:44PM  
About a year ago I droped verizon and went to pageplus which usees all verizons towers and for a flat 46 bucks a mo. I get unlimited talk and text! It give as good a coverage as verizon and is alot cheaper. I did like verizon though and it's service is the best bar none!

free dating | mission statement | testimonials | safety warning | report abuse | safe list | privacy | legal | 2257 | advertise | link to us

© Copyright 2000-2016 Online Singles, LLC.
AT&T to acquire T-Mobile for 39 billion