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How Desperate Is AT&T for T-Mobile?
September 2, 2011 10:43 AM
Like a sweaty salesman beside a used '84 Corolla, AT&T's asking aloud, "What do I have to do to get this deal to go through?"
This week, after five months of claiming the buyout is a good thing for everyone, AT&T saw its chances of acquiring T-Mobile diminish as the
US Department of Justice filed an antitrust complaint
in federal court. Echoing the sentiments of every cell customer in America, the federal bureau stated the merger would "remove a significant competitive force from the market."
That's tellin' 'em!
But AT&T remains undeterred -- some might even say desperate -- to have the deal approved. After all, not only does it stand to gain T-Mobile's 33 million US customers and infrastructure if the merger goes through, but also
AT&T stands to lose roughly $6 million
in cash, spectrum, and roaming privileges within a break-up fee if the acquisition is denied.
according to Reuters
, AT&T may attempt to sweeten the deal by foregoing as much as 25% of T-Mobile's business. That sizable chunk would include customers and airwaves. And should that occur, the assets would be made available to AT&T's competitors and could potentially be snatched up by Verizon or Sprint.
However, either scenario would be at the mercy of more antitrust investigation.
Former antitrust enforcer Bob Doyle told Reuters that AT&T would have to succumb to divestitures on both the regional and national level in order for the merger to look better in the eyes of the feds. And if that 25% chunk of T-Mobile is acquired by Verizon or Sprint, both companies would have to do the same.
And Doyle says there's not much likelihood for that. "Verizon's a no go. Sprint may be a no go also," he said.
The way things are progressing, this looks like it can be a rare win for mobile customers. Let's all take a moment to enjoy it.
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by Sean Udall.
No positions in stocks mentioned.
DEPARTMENT OF JUSTICE
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