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AT&T Faces Penalty If T-Mobile Deal Falls Through

Article Comments  30  

Mar 21, 2011, 7:50 AM   by Rich Brome   @rbrome

AT&T today outlined terms of its deal with Deutsche Telekom that would kick in if the deal to buy T-Mobile USA falls through, for example if the government nixes the deal or imposes terms unacceptable to AT&T. AT&T would owe T-Mobile $3 billion, plus the transfer of AWS spectrum licenses that are "not critical" to AT&T's initial LTE deployment, were it to go it alone. The company would also be required to accept a roaming deal for areas where AT&T provides coverage but T-Mobile does not, ensuring that T-Mobile's coverage will improve to match AT&T's whether the deal goes through or not.

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Comments

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Cellular Phone

Mar 21, 2011, 7:54 AM

I think AT&T entered this agreement on purpose.

That way they would have some leverage to bargain with the DoJ and FCC, arguing that AT&T will suffer a financial loss if the deal is blocked from proceeding. At&t knows what it is doing.
Heck, they better know what their doing! They just spent $39 billion.
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What if the FCC and DoJ just see this as a way to "redistribute" the wealth of a company to another one by simply saying "No"?

T-Mobile is restricted by their spectrum, and most likely funding since DT isn't exactly pouring money into.

I do wish...
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Actually I think it was put there by AT&T to reassure skittish German investors that even if the deal doesn't get approved they will still profit.....it's there to 'sweeten the pot' so to speak for T-Mobile...
flip mode

Mar 21, 2011, 4:42 PM

hope it fails

this buyout of a superior network only to absorb it into a bigger crappier network is an abomination
lh1031

Mar 21, 2011, 7:55 AM

Props to T-Mobile

Just wanted to say good job T-Mobile. Way to think ahead!

I, now even more than before, hope the government turns down this deal. Not only because my personal opinion is against AT&T, but because if they let it go through they are only going to be perpetuating the kind of policies which is leading to the loss of the middle class and the economic crisis we are facing.
Evil or Very Mad This proposition really pisses me off! I just left at&t for T-mobile for better rate plans and less restrictions (ie no 2G data caps). Now to find out they are in talks to buy them outrages me! I know the terms of my t-mobile contract will be ...
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lh1031 said:
Just wanted to say good job T-Mobile. Way to think ahead!

I, now even more than before, hope the government turns down this deal. Not only because my personal opinion is against AT&T, but because if they let it go
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Hate to break it to you, but this kind of provision is pretty common in big acquisitions....it is not there because T-Mobile insisted on it, but because AT&T did....

Here is what happened at the negotiations:

att: We want to buy T-Mobile USA
DT...
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