AT&T and Deutsche Telekom AG have entered into a definitive agreement under which AT&T will acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction currently valued at approximately $39 billion. The agreement has been approved by the boards of directors of both companies.

According to the announcement from the two companies, the merger provides an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term. In addition, it provides a fast solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to meet the ongoing demand for mobile broadband.

With this transaction, AT&T commits to a significant expansion of Long Term Evolution (LTE) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans, including rural communities and small towns. T-Mobile USA does not have a clear path to delivering LTE.

Addressing the inevitable criticism that the merger will reduce competition, AT&T and Deutsche Telekom said, "The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers in their local market. For example, in 18 of the top 20 U.S. local markets, there are five or more providers."

Although it’s way too soon to predict how a merger would impact the two companies’ employees, today’s announcement said, "AT&T is the only major U.S. wireless company with a union workforce, offering leading wages, benefits, training and development for employees. The combined company will continue to have a strong employee and operations base in the Seattle area."?

The acquisition is subject to regulatory approvals, a reverse breakup fee in certain circumstances, and other customary regulatory and other closing conditions. The transaction is expected to close in approximately 12 months.

As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that, based on the terms of the agreement, would give it an ownership interest in AT&T of approximately 8 percent. A Deutsche Telekom representative will join the AT&T Board of Directors.


Myriad groups that will be affected by the merger have already begun to weigh in. For example, the United States Distance Learning Association and The Hispanic Institute have both announced their support.

ABI Research released a statement saying, "Deutsche Telekom’s management has had two widely-reported headaches over the past two to three years: the T-Mobile businesses in the US and UK. The UK dilemma was resolved about 18 months ago by a merger with Orange, and now the group seems finally to have found a dance partner for T-Mobile USA as well. The fact that it’s AT&T and not Sprint makes a lot of sense. Nonetheless, the move will create a nationwide carrier that will be much more powerful (by nearly one-third, in terms of subscriber market shares) than its closest challenger, Verizon."

ABI Research industry analyst Aapo Markkannen said in a statemet, “There’s no doubt that this will cause a major regulatory hiccup, and the new ‘T-AT’ will have to shed spectrum and other assets in many areas where it operates. But at the end of the day, ABI Research’s take is that the deal will go through in one form or another.”

The Daily


Doing Good

T-Mobile is donating $1.25 million towards causes that are advancing educational equity for LGBTQ+ youth. A sum of $1 million will be directed towards the Human Rights Campaign Foundation ’s new financial

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