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    AT&T, Telekom to press ahead with T-Mobile deal

    By The Associated Press | AP – Fri, Nov 25, 2011

    Deutsche Telekom and AT&T vowed Thursday to press ahead with the planned sale of the German company's T-Mobile USA unit to the U.S. cell phone operator despite concerns raised by American authorities.

    Nevertheless, AT&T said it plans to take a pretax accounting charge of $4 billion in the current quarter to reflect the break-up fees that would be due to Deutsche Telekom if regulators block the deal.

    The two companies said they had withdrawn applications to the Federal Communications Commission regarding the merger and intended to seek its approval again "as soon as practical."

    They took the step to consider "all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice," which filed a lawsuit in August to stop the deal, AT&T said in a statement.

    "Both companies are continuing to pursue the sale of T-Mobile USA to AT&T," Deutsche Telekom stressed.

    Both U.S. agencies worry that the deal would hamper competition and lead to higher prices for consumers.

    Deutsche Telekom AG and AT&T Inc. made their move after the chairman of the FCC earlier this week came out against the merger.

    Julius Genachowski made his position known in a document he circulated to fellow commissioners Tuesday.

    He recommended sending AT&T's proposed $39 billion takeover of T-Mobile to an administrative law judge for review and a hearing. That's what the FCC does when it opposes a merger.

    In a research note Thursday, Jefferies International analyst Ulrich Rathe said the withdrawal of the FCC application, as well as the opposition by the Justice Department, indicate that "the companies are already well into working out a new version of the deal."

    The analyst, who rates Deutsche Telekom "Buy," said the charge confirms the break-up fee will be difficult for AT&T to avoid if the deal is not completed.

    In Frankfurt, Deutsche Telekom shares closed down 0.6 percent Thursday at euro8.69 ($11.67), almost mirroring the 0.5 percent decline in the DAX index of blue-chip stocks.

    The proposed deal, announced in March, would vault the combination of America's No. 2 carrier AT&T and No. 4 T-Mobile into the top spot ahead of Verizon.

    Dallas-based AT&T has about 101 million wireless subscribers. T-Mobile, the Bellevue, Washington-based subsidiary of Deutsche Telekom AG of Germany, has 34 million.

    Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, has about 108 million, while Sprint Nextel Corp. has 53 million.

     
    • Lonnie
      Lonnie  •  Irvine, United States  •  6 mths ago
      Another move by wallstreet to eliminate competetion in phone companies the merger will benefit only the upper level negioaters
      • Mike A
        Mike A 6 mths ago
        Wallstreet has nothing to do with this. Its a German company only selling off their section in America. Get your facts straight.
    • trucho
      trucho  •  Washington, United States  •  6 mths ago
      I have been a faithful costumer of T-Mobile for many years, if AT&T absorbs T-Mobile then, both of them can go to hell.
    • Mike
      Mike  •  Hanover, United States  •  6 mths ago
      I can promice you this. If they do merge I will drop t-mobile and go to sprint.
    • youbet
      youbet  •  Santa Clara, United States  •  6 mths ago
      Just think if ATT is successful with this merger then the game of leopfrog will begin with the merger of Verizon and Sprint thus retaining the status of # 1.The outcome would only provide 2 major competators.This senario would not be allowed
      • bjm
        bjm 6 mths ago
        t mobile is dead no major what.

        You are forgetting Sprint also and it can complete.
      • Al
        Al 6 mths ago
        Sprint has not turned a profit since 08' and they just poured 20B into buying the over-priced IPhone.

        And everyone is convinced they'll be bought up fast.
    • rlk62098
      rlk62098  •  Olympia, United States  •  6 mths ago
      Where are either the FCC or FTC in protecting the customer's rights? AT&T charges excessive fees and has ridiculous restrictions on everything from payments to changing plans, and its prepaid offerings and consumer service are next to nothing. T-Mobile has some of the best pre-paid plans, reasonable rates, flexible switch over options, and very good local customer service (at least in Washington), so why must AT&T be allowed to ruin T-Mobile (which is what they did with Cingular)? I suppose my next move is to Sprint's Boost service, if this goes through. Thank you T-Mobile and RIP. No thanks to AT&T.
    • JustAnotherBrickIntheWall
      JustAnotherBrickIntheWall  •  Chicago, United States  •  6 mths ago
      FCC please don't let this happen. AT&T is a crappy company and they want to get to be "too big to fail".
    • Lonnie
      Lonnie  •  Irvine, United States  •  6 mths ago
      MERGERS CREATE MORE UNEMPLOYMENT
    • D A
      D A  •  Sacramento, United States  •  6 mths ago
      No one wants ATT, if the merger went through they would lose a huge chunk of the T-mobile base regardless this isn't Sprint and Nextel
    • Lonnie
      Lonnie  •  Irvine, United States  •  6 mths ago
      The breakup fee is 4 billion.who gets this huge ammount
      • Jennifer
        Jennifer 6 mths ago
        The company that owns TMobile. The $4b is only part of the break-up cost, though.
    • A Yahoo! User  •  Richardson, United States  •  6 mths ago
      man o man, AT&T can barely keep me connected much less handle more people from T mobile. There dsl service stinks to high heaven,it disconnects, doesn't connect, losses connection, they cant deliver on what they sell. The problem is they are connecting everybody and their dog to online streaming of crapola. Who the hell wants to see movies on their computer, not me. Thats why i got a TV. Now the dummies want to raise their service fees on bad service. Give me a break.
    • L R
      L R  •  6 mths ago
      I will leave T-Mobile if it's bought by ATT. I had too many issues with ATT. Especially when they allowed my password protected account to be compromised.
    • Clam Jammer
      Clam Jammer  •  6 mths ago
      While I am personally against the merger, I don't see a point to continuing to try to make it happen. Even if the administrative law judge approved it the DOJ will nuke it since they've already made it clear they are not in support. AT&T needs to pick their battles and back off, they're just going to waste more $$ and guess who's going to end up paying for that??? I am very happy with T-Mobile and if the merger had gone thru I would have moved to Sprint just to give AT&T a big old F U !!!
    • CHASM
      CHASM  •  6 mths ago
      OK, AT&T wants to purchase T Mobile for 40 billion and agrees to pay a penalty of 4 billion if the deal doesn't go through? Then wants to take the 4b as a tax deduction? #$%$ Who in their right minds would enter into such a deal without at least getting a reality check from the DOJ and the FCC up front? And why is the tax code set up so these idiots could make such a #$%$ deal and slam the American tax payers? These are our business leaders? No wonder the American economy is in deep stuff. AT&T stock holders should be screaming for these guys heads in a basket.
    • Robert
      Robert  •  6 mths ago
      they decided to withdrawal to get there policitcal lobbist togther to bribe the proper people to push this threw! never mind what the public say about limiting competition, its about making money. I'm still trying to figure out how making two companys into one, adds job aren't their managers that do the same job at both companys, won't one of them get fired! (New Math!)
    • Breadman
      Breadman  •  Chicago, United States  •  6 mths ago
      ATT aim has always been to not supply the best service but to supply the only service.....
    • Kurtayn
      Kurtayn  •  6 mths ago
      It is time for a company with truly unlimited data and good service that isn't ridiculously expensive to come out.
    • Robert
      Robert  •  Warrensburg, United States  •  6 mths ago
      ATT can't servide their own network and they want to add to it!!! Forget it and block this deal!!!
    • walkingfree
      walkingfree  •  6 mths ago
      Can AT&T pay for it in cash? Will they get a loan to do it? Who will end up paying for it? Bad idea all the the way around for consumers not to mention the jobs lost to the merger. Who does the FCC really protect? So many questions....
    • Emilyrose3rd
      Emilyrose3rd  •  6 mths ago
      Anyone who has AT&T or T-Mobil is about to get screwed if this deal goes through by paying higher fees in the overall picture while the CEO's walk away with millions and millions in stock options and cash. It happens everytime these big mergers are approved.
    • Emilyrose3rd
      Emilyrose3rd  •  6 mths ago
      A good screwing is on the way if this deal is approved. Let's just see how the FTC and FCC Commissions handle this after they have already said no!
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