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AT&T to buy T-Mobile USA for $39 billion

AFP · 20 Mar 2011, 20:35

Published: 20 Mar 2011 20:35 GMT+01:00

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The cash-and-stock deal has been approved by the boards of both companies and would make AT&T a dominant player in the wireless telecom sector, pending regulatory approval.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T chairman and chief executive. "It will improve network quality, and it will bring advanced...capabilities to more than 294 million people."

Deutsche Telekom chairman and CEO Rene Obermann said said that AT&T "is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and

provides an efficient path to gaining the spectrum and network assets."

As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that of around eight percent, and a representative of the German firm will join the AT&T board.

The cash portion of the purchase price will be financed with new debt and cash on AT&T's balance sheet. AT&T has an 18-month commitment of $20 billion underwritten by JP Morgan.

The deal will give AT&T a big boost in its rivalry with Verizon, which recently started selling the Apple iPhone with an end to the AT&T monopoly. Analysts said the deal also helps AT&T in the so-called 4G sector offering more advanced wireless services.

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"AT&T has been under attack for not being able to match the network capacity of larger rival Verizon," said MG Siegler of the technology blog TechCrunch.

"And when they won the majority of the bids for the open spectrum in 2008, Verizon also had a clear path to the future. Now AT&T is taking another path: buying T-Mobile."

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Your comments about this article

21:56 March 20, 2011 by pepsionice
One loser of a company....buying another loser of a company.
21:57 March 20, 2011 by hanskarl
Schade, T-Mobile is to me better than AT&T. Common knowledge in the US is iPhones drop calls outside of the main cities especially in outlying areas. I wish it were the other way around.
23:12 March 20, 2011 by Altdude
Industry concentration does not create a more beneficial environment for the consumer. As a T-Mobile customer who left AT&T because of terrible service, I feel frustrated. The buyout, if approved by the regulatory agencies, should be grounds for termination of my contract with T-Mobile so that I, too, may switch to Verizon.
00:01 March 21, 2011 by cobalisk
Altdude is right, what is missing form most analysis of this deal is the continuing concentration of telco in the US.

AT & T was divested in 1984 but since 1996 the mergers and acquisitions have recreated gigantic mega-regional monopolies. There are not may players left and this does not benefit the consumer.
08:39 March 21, 2011 by catjones
Two cans; one string.
09:29 March 21, 2011 by nolibs
This should not be approved. On my last trip to the United States, I was not able to use AT&T data ($19.95 per 100mb) on my German unlocked Iphone because AT&T required a contract with the Iphone.The operator said I could by another phone and it would work.

T-mobile, the only other real GSM carrier, suffered from a lack of coverage. So, crappy service, dropped calls (not an exaggeration), and high prices from AT&T or bad coverage and signal penetration in buildings from T-mobile...but at least some competition!

I used to think prices in Germany were crazy for mobile broadband (especially compared to Austria), until I went to the United States. Mobile broadband is at least 5 years behind Germany in terms of cost.
18:56 March 21, 2011 by xx.weirich.xx
T-Mobile is TERRIBLE!!! I had a contract with them once and ended up paying a ridiculous amount, and the phone didn't even work. I couldn't use the unlimited texting feature that I had paid so much for, and the call quality was spotty and dropped all the time. There's a reason Verizon is so much more popular.
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