AT&T announced late today that it will no longer try to acquire T-Mobile USA. The planned merger of the second biggest wireless provider in the US with the fourth largest was first announced in March 2011. AT&T said at the time it would pay $39 billion to purchase T-Mobile USA from its parent company Deutsche Telekom. AT&T added it would use the acquisition to help expand its plans for a faster LTE network.
However the merger plans were almost immediately met with resistance from other parties, including the nation’s third largest wireless carrier Sprint. In August the Department of Justice filed a lawsuit against AT&T, claiming that the merger would cause less competition in the wireless phone industry. In November the Federal Communications Commissionissued a report that was also highly critical of the planned merger.
In today’s press release AT&T said that the actions of the two government agencies would cause issues with being able to increase the amount of spectrum needed for future wireless expansion. AT&T said, “In the absence of such steps, customers will be harmed and needed investment will be stifled.”
Randall Stephenson, the chairman and CEO of AT&T said that even though the merger has been called off the company will still continue to invest in expanding its wireless infrastructure. He added:
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.
AT&T will now take a $4 billion charge in the fourth quarter of 2011 due to the cancelation of the T-Mobile merger. It added that it would team up with Deutsche Telekom on a “mutually beneficial roaming agreement.”