Business
2:00 pm
Mon December 19, 2011

AT&T drops bid for T-Mobile

AT&T ends its $39 billion bid to acquire T-Mobile USA from Deutsche Telekom amid antitrust concerns, The Associated Press reports.

The cellphone giant said that the actions of the government to block the deal do not change the challenges of the wireless phone industry, which it says requires more airwaves, known as spectrum, to expand.

The deal would have solved that problem for a time, and without it, "customers will be harmed and needed investment will be stifled," AT&T said in a statement.

It called on the government to quickly approve its purchase of unused spectrum from Qualcomm Inc. and come up with legislation to meet the nation's long-term needs.

Justice sued to stop merger

In August, the justice department sued to block AT&T’s acquisition of the Bellevue-based T-Mobile USA, arguing it’s a bad deal for consumers. But here in Washington, an even greater threat was the impact the merger could have on local jobs and the economy.

Soon after the announcement by the justice department there was a collective sigh of relief from some Washington residents. T-Mobile employs about 3,300 people in Bellevue. With unemployment over 9 percent, government and business leaders are looking to hang on to every last job they can.

Previous merger killed jobs

In 2004, when Cingular acquired AT&T wireless – based in Redmond – they cut 1,200 positions, and the new AT&T is based in Dallas.  A year later, Western Wireless, another Bellevue company, was acquired by Alltell – now Verizon. Within two years, almost 90 percent of those jobs had been eliminated.

That’s why there was such concern over the current proposed merger.

Giants in the industry

AT&T, the nation's second-largest wireless carrier behind Verizon Wireless, faces paying Deutsche Telekom $3 billion in cash and may have to enter into a roaming agreement with Deutsche Telekom, while transferring it the rights to spectrum it doesn't need for the rollout of its planned, next-generation "4G" network.

AT&T's purchase of T-Mobile from Deutsche Telekom of Germany would have made it the largest cellphone company in the U.S. T-Mobile is currently the fourth-largest.

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