AT&T Hangs Up On T-Mobile Deal

by , Dec 19, 2011, 5:33 PM
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AT&T said today said that it withdrew plans to acquire Deutsche Telekom AG’s T-Mobile. The acquisition proposal had come under intense scrutiny by the FCC and Justice Department, which sued to block the merger. The deal valued at $39 billion would have made AT&T the largest wireless provider in the U.S.

It remains the second-biggest mobile carrier, behind Verizon Wireless, and T-Mobile stands as the fourth-largest.

In a statement issued by AT&T the company said: “The actions by the Federal Communications Commission and the Department of Justice to block the 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.”

AT&T and other wireless industry analysts often argue that the FCC’s tight control over available spectrum makes it necessary for companies to combine assets and spectrum licenses in order to get the coverage they need to expand. The Justice Department and some of AT&T’s competitors claimed such a merger would create too few major competitors in the market place.   

In the course of announcing the end of the deal, AT&T said in its statement that policymakers needed to make more unused spectrum available faster in order to facilitate growth in the industry.

AT&T says the company will take a $4 billion charge for fees due Deutsche Telekom, but that the two companies had agreed to mutually beneficial roaming agreements.

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