AT&T Buys Wireless Rival T-Mobile USA for $39B

AT&T, the second largest U.S. wireless carrier, agreed Sunday to buy the nation's fourth biggest carrier from Deutsche Telekom AG in a cash-and-stock deal

AT&T will pay $39 billion in cash and stock to acquire wireless rival T-Mobile USA, the companies jointly announced Sunday.

The deal will combine AT&T, the second biggest wireless brand in the U.S., with the nation's fourth-leading brand.

AT&T will pay Deutsche Telekom AG $25 billion in cash for T-Mobile; Deutsche Telekom will also receive 8 percent in AT&T company stock.

The deal is expected to take about a year to gain the needed regulatory approval and close.

Also read: 'AT&T Is Only Acting Like It's Too Incompetent to Sell Me Services. Genius!'

Bellevue, Wash.-based T-Mobile USA is coming off of two consecutive fiscal year of flat revenue and has struggled to keep pace with larger rivals AT&T and Verizon.

The company's subscriber count has stalled at just under 34 million, according to the Associated Press, but it has remained consistently profitable.

There had rumors prior to AT&T's overture that Deutsche Telekom would sell the asset, the speculation circled around Sprint Nextel Corp.

In their statement, both companies indicated that the merger will provide for improved broadband capabilities — a sore point for AT&T, which has heard plenty of complaints from iPhone users over the last several years.

The companies said the merger will provide a "fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets, which limites both companies' ability to meet the ongoing explosive demand for mobile broadband."

The companies also said the merger would speed up the roll-out of the next-generation wireless standard LTE. AT&T said it's commtting to "significant expansion of robust 4G LTE," with plans to reach 95 percent of the U.S. population.

In the statement, AT&T said the company is "confident in our ability to executve a seamless integration."

For its part, Sprint is still struggling to figure things out after its 2005 takeover of Nextel.

However, AT&T has plenty of experience with mergers, having successfully ingested its $85 billion purchase of BellSouth in 2006.

"AT&T's acquisition of T-Mobile, if approved, brings good and bad news," Forrester Research analyst Charles Golvin told Mashable. "The good news: high-speed mobile broadband service will improve in quality and coverage, including — in the long run — those in rural communities outside the reach of terrestrial broadband today."

The bad news, Golvin added: "The cost of that service wont' come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the U.S."

 

 

 

 

  • mrgaribaldi2263

    Verizon, here I come.

  • mc1985

    That sucks… guess I need to find a new phone service company… I loved t-mobile and hate AT&T

    • Ma'at

      Yeah I went from AT&T to Verizon. I just couldn't take AT&T's crap service anymore.

  • GESharp

    Unmitigated deregulation/acquisition continues to eliminate competition in order to squeeze every last dollar from consumers, reduce total payroll as much as possible, and by all means, send those dollars to the top baby!

  • AT&T Sucks

    Two of the worst companies now combine. AT&T sucked after they merged with Cingular and they're sure to suck even worse now. I've had more problems since I switched to them from Verizon than any other company. At one point my freakin’ cell phone would not receive calls from certain landlines because they screwed up something when programming my number. They totally suck as a company.

    And when I was with T-Mobile 7 or so years ago, they had the worst customer service, and put toll charges on my bill for no reason.

    Verizon, I'm sure I'll be coming back soon. I swear baby, the only reason I left was b/c my fiancee was with AT&T and they sold me on the roll-over minutes. But we'll both just switch to Verizon when our contracts are up. With Verizon for 6 years and never had any problems. Their coverage/service is superior as well as their customer service.

    • Tanderson698

      They are a good company but they really need to hear their us on there paying plan their old Verizon plan was a sweet deal so I hope they fix it im with them now.

  • Ray

    oh crud. AT&T is the worst phone company out there. I hope this means i can void my T-Mobile contract.

  • Tanderson698

    Well now I know not to go with t moblie anymore

  • Colcam

    Tears.

  • Comedy Writer

    Nice! I can now have my calls dropped by the largest 4G network. Oh, and if you doubt this is coming…better brush up on your Hindi. You'll need it soon to speak with customer service.

  • Cactusvic

    I guess that means we will never again see Catherine Zeta-Jones, or that little cutie they are using now, on the Tee Vee any more. I use Verizon, so that is the only consequence to my life. Boring.

  • Ma'at

    Oh good. The worst cell phone service in the Nation gets bigger.

    Glad I left AT&T for Verizon once my contracts were up.

  • Shel

    Switching from T-Mobile immediately for real. AT&T is truly the WORST company we've ever dealt with in any way in terms of customer service. It's not just that there's no service, they go out of their way to provide the WORST most miserable customer service, making things as hostile, nasty, protracted and non-functioning as possible. Even when you escalate to the level of the Office of the President, they are equally nasty and inefficient and unresponsive, some of their employees are very sketchy and even get threatening and scary. There's no management, no oversight, it's a wild beast. They don't care because there's no competition and consumers have no choice. AT&T destroyed Cingular/PacBell. What a charade that was when the govt. asked for consumer input before that merger, corporations run the country.

  • PNK

    This is why I am with Virgin Mobile – no contract, no bill, no fees, I owe nothing – EVER. I pay cash at stores for a minutes/text card and add as I want. hahahahahahaha

    • Darrbean3

      Keep track of your minutes. Minutes on pre-paid phones can have a tendency to mysteriously disappear through different scams. Whether it's pre-paid or contract, you still have to deal with bad service though.

  • http://twitter.com/Magaret999 Magaret

    The bad news, Golvin added: “The cost of that service wont’ come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless camera with receiver subscriptions in the U.S.”.