AT&T's planned $39bn acquisition of T-Mobile USA from Deutsche Telekom is dead – and it's costing AT&T $4bn to kill it. "AT&T Inc. said today that after a thorough review of options it has agreed with Deutsche Telekom AG to end its bid to acquire T-Mobile USA, which began in March of this year," the company said in a statement …
That $4bn charge smells like Olympus' scam to hide losses. They don't have to pay taxes on that amount of revenue AND the CEO and cronies are assured of a nice bonus.
Speaking as a T-Mobile customer and previous AT&T customer: Thank goodness!
@dognolegs. Completion of contract old chap?
AT&T reached an agreement with Deutsche Telekom and signed on the dotted line. Part of such agreements is a fee to be paid by the one party if the other party "fails to complete". For reasons for which DT cannot be held liable AT&T has withdrawn from their agreement thus making them liable for the $4bn fee, the size of which was stipulated as part of the original agreement. AT&T on this occasion is just having to pay up for their own misjudgement in betting that they would succeed in scamming something close to recreating the old Bell monopoly past the competition authorities in the US. They fucked up and they are having to pay for it.
It's almost as if they WANTED to give $4 billion to Deutsche Telekom
Well, imagine telling this to the shareholders beforehand: "We're going to have a punt at world domination, very little chance of it succeeding given the history, but we'll be chucking $4 billion down the toilet with this little flutter." Doesn't make much sense unless there is a hidden motive.
How can it be a scam?
Unless T-Mobile are quietly laundering most of back to them?
I have no idea though why they agreed such a daft penalty.
I wonder what T-mobile / Deutsche Telekom will do with it? You could almost do FTTH for small country like Ireland with that and have enough left for Urban /Suburban LTE for 80% of Irish Population.
Or do 1/2 of Brooklyn.
Big penalty? because TMobile arent bankrupt and a decent going concern. TMobiles shares would have taken a massive tumble so a big penalty shows that the company is both strong and sufficient if the deal didnt go through.
AT&T isn't losing $4B...
They'll pass it off to subscribers. Any AT&T employees who doubt it can look for one or more of these:
- AT&T employees see no plan costs increase, while subscribers do
- AT&T employees see larger than previous bonuses, even if headcount goes up
- AT&T hires more techs and buys more vans
Spam is scam and T-Mobile is a spammer
However, having said that (which explains why I promise I will NEVER be a T-mobile customer), my main comment is that freedom is good, and freedom is about meaningful and unconstrained choice. It should be fundamentally illegal for winners to reduce our choices and for losers to take the easy way out of selling off their customers--especially since the losers' customers had already freely chosen NOT to be customers of the so-called winner.
Here's my suggestion. Any company that is big and successful should be required to reproduce that success, thereby creating MORE choice and MORE freedom for the customers. Instead of an endless search for monopoly profits, the winner, say a company with more than 40% of the market share, would become two smaller companies starting out with 20% each. It is NOT a penalty for success, but recognition that the company has done such a good job we want TWO companies just like it, at least initially.
Of course it will never happen. The biggest companies are owned by the richest and least ethical businessmen, the same ones who bribe the politicians to write laws that require the companies to become more and more evil over time. Most businessmen are NOT that way, but it's actually a tiny minority of the WORST businessmen who decide on the rules of the game in America.
P.S. I will NEVER forgive T-Mobile for the repeated and unsolicted spam. I really HATE spammers.
It should be fundamentally illegal for winners to reduce our choices.....
... and for losers to take the easy way out of selling off their customers
Ok, how exactly would you frame that in law? Let alone enforce it?
"Worst business decision of 2012."
Really, it's NOT a business decision. It's an administrative decision. And even then it would be "of 2011".
So much for "business owns the government". All that spying on behalf of certains parts of the administrative security übercomplex doesn't even buy you votes at the FCC. Yep, fascist administrations are fickle.
please tell us that...
you are going to do a new year article featuring all those business decisions in full?
I nominate any decision by any HP executive or for a long term prediction the thousand dollar ultrabook price tag.
if Deutsche Telekom knew from the beginning how this would end. Hats off to them then.
Worst business decision of 2012
Is this a suggestion that AT&T, Netflix and RIM are forward dating their poor decisions in some finacially advantagous way?
That must be what they call creative accounting.
Sounds like Deutsche Telekom have played a blinder
$4Bn straight profit for doing sweet FA coming right from the pockets of a major competitor. A competitor that will likely have to raise prices and become less competitive to recoup the loss.
AT&T got hustled!
AT&T now have complete financial details about T-Mobile and a copy of all their business plans. Basically at this point there's not much about T-Mobile (still an AT&T competitor) that AT&T don't know about.
True they will have a good idea about their funding situation and maybe 12-24 months view on their plans. However those plans were before they had $4bn, a bunch of extra spectrum and roaming agreements to play with. Tmobiles business plan is fairly transparent, be the cheapest mainstream provider, at least on headline rates.
Where they are going, I'm guessing using the money for more infrastructure, a faster full 4g rollout etc. Maybe a merger with a cable company?
In some ways its a shame the us market is fragmented between two technologies, one of which isn't widely used outside the usa (apart from providing some of the technologies used in gsm 3g).
As a recent tmob customer (moved from sprint, not entirely happy with coverage with tmob), this seems to be a good thing.
We still have 2 main gsm companies (I know cdma has some worldphones but the key word is some!) which makes travelling to the rest of the world a bit easier.
Hopefully the $4bn gets reinvested in the company, not to mention the spectrum they get and the roaming agreement. I might end up staying with tmob if they get their act together! Their plans are pretty good, just the service level isn't as hot but I guess you get what you pay for.
I know why at&t would want to merge, forget the customers (at&t wants high arpu / acpu subs), they want spectrum and less competition. Quite how they thought they would get it passed a democratic potus I'm not sure. No particular slight against dems or repubs, I just see the dems pushing for it to be blocked and the repubs pushing for it to be allowed. A costly mistake for at&t for sure. I bet the brass behind the idea get a big bonus for the loss.
I suspect that a lot of the 4 billion was already spent on due diligence work to prepare for the merger. T-mobile (my current cariier) doesn't have enough spectrum to compete by itself, but at the same time I couldn't stomach AT&T (my former carrier) and its greedy billing practices to get any bigger.