Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now


Analysts Are Down On AT&T, T-Mobile Merger Prospects


— The prospects for AT&T’s proposed
acquisition of T-Mobile have dimmed
considerably in the wake of the Justice Department’s
suit to block the merger and reservations
expressed by Federal Communications Commission
(FCC) chairman Julius Genachowski.

But AT&T could still prevail in the expedited
court hearing that it will request or reach an outof-
court agreement with the Justice Department
to salvage part of the deal, they said.

Whatever happens, T-Mobile parent Deutsche
Telekom could be the big winner, independent
analyst Jeff Kagan said. If the deal doesn’t go
through, he pointed out, “AT&T has to pay TMobile
$3 billion in cash and $2 billion in spectrum,”
he said of the deal’s break-up provisions.
“That would let T-Mobile grow into a healthier

To salvage all or part of the deal, IDC said it
believes AT&T will have to consider “a multitude of
concessions” to “further its discussions” with the Justice Department and FCC. They would include
selling off spectrum in markets where the combined
companies would have “too much market
power,” the company said.

Selling off spectrum, however, could prove to
be a hard sell to the court and to the government
agencies, IDC noted. Selling spectrum on a
market-by-market basis “is an easier proposition
when dealing with a more competitive landscape
— such as going from six players down to five,”
IDC said. The research company also noted that
the Justice Department “does not pay any heed
to the influence of MetroPCS and Leap, which at
this point, are arguably quasi-national competitors.”

Said Kagan, “Never say its over. It depends how
badly AT&T wants this spectrum and what they
are willing to do next. And they really want this