AT&T-Mobile deal is dead: Now what?
AT&T’s $39 billion bid for T-Mobile is finished: Thanks to the U.S. government’s efforts to block the deal, AT&T is pulling out. So, now what?
- AT&T will have to pay T-Mobile a $3 billion breakup fee, plus a large amount of wireless spectrum, and will enter into a roaming agreement with T-Mobile.
- AT&T will have to figure out a new way to improve its often-lousy wireless network. That was one of its big pitches: That having access to T-Mobile’s airwaves would mean better wireless services for AT&T and T-Mobile customers. Now it’s back to the drawing board.
- T-Mobile will have to figure out a new path to 4G LTE. The airwaves, cash, and roaming deal it’s getting from AT&T might help.
- The tech/media/telecom industry — and especially AT&T’s legal team — has learned a lesson about the current environment for big-deal consolidation. It’s a much different era than 5 years ago, when AT&T was able to buy BellSouth for $86 billion.
- So, that said: Verizon Wireless definitely won’t be buying Sprint — that would have been even bigger than this deal, in terms of consolidated market share. Although Verizon’s new deal with the cable industry — if that’s not blocked — looks especially sweet after today’s news.
- Sprint and T-Mobile probably won’t be merging, either. That would be a mess, anyway.
- With the merger limbo finished, Apple may finally have to make a special iPhone for T-Mobile. (I’m not sure if T-Mobile could/would rely on AT&T roaming just to officially support iPhones.)
- T-Mobile ad girl Carly Foulkes presumably gets to keep her job. Phew!
- T-Mobile parent Deutsche Telekom — based in Germany — will now have to figure out if it’s going to be in the U.S. for the long haul or if it’s going to try to find another partner for T-Mobile. Perhaps one of the satellite companies, such as Dish Network, DirecTV, or Sirius XM? Or Google?
Check out my new site: The New Consumer, a publication about how and why people spend their time and money.