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Timeline: The birth and death of the AT&T/T-Mobile merger

A look back at a short-lived mega-merger proposal

By Brad Reed, Network World
December 21, 2011 10:20 AM ET

Network World - In retrospect, it's not hard to see why AT&T thought its proposed $39 billion merger with T-Mobile would sail through with relatively few issues.

FLASHBACK: FCC chief declares AT&T/T-Mobile merger a turkey, prepares it for slaughter

After all, the previous decade has seen many high-profile wireless telecom mergers, including AT&T-Cingular in 2004, Sprint-Nextel in 2005, and Verizon-Alltel in 2008, that have led to a more concentrated wireless industry with only four major players. However, it seems that any proposal that would have whittled the wireless industry down to just three major players was one merger too far for federal regulators, who teamed up to quash this one less than a year after it was proposed.

Here is a look back at the AT&T/T-Mobile mega-merger that wasn't:

March 2011: AT&T announces its plans to acquire T-Mobile for $39 billion. At the time, the combined AT&T/T-Mobile subscriber base totaled more than 130 million subscribers, meaning that the merger would make AT&T the largest wireless carrier in the United States, followed by Verizon (94 million subscribers at the time) and Sprint (53 million). While consumer groups voice objections to the proposed merger, most analysts say they expect it will sail through confirmation as long as AT&T agrees to give up significant portions of its spectrum holdings that overlap with T-Mobile's spectrum.

May 2011: AT&T CEO Randall Stephenson testifies before the Senate Judiciary Committee and says that AT&T needs to purchase T-Mobile to have enough spectrum depth to launch its 4G LTE network in many rural areas of the United States. Despite the fact that AT&T does boast more spectrum than its chief rival, Verizon, Stephenson says the carrier still needs "20MHz of contiguous unused spectrum" to launch in many parts of the country. Sprint CEO Dan Hesse, whose company has stridently opposed the merger from the start, says AT&T has more than enough spectrum to meet its needs and accuses the company of improperly managing its spectrum assets.

August 2011: In the first major sign of trouble for the proposed merger, the U.S. Department of Justice files a civil antitrust suit to block the acquisition. In its filing the Department of Justice argued that further consolidation would harm competition in the wireless industry, especially since T-Mobile has traditionally offered low-cost voice and data services for consumers. Even more ominously, Federal Communications Commission chairman Julius Genachowski issued a statement saying that the FCC also had "serious concerns about the impact of the proposed transaction on competition."

September 2011: Sprint piles on and files a similar antitrust suit against the merger.

November 2011: Genachowski further mucks up AT&T's plans by filing a proposal for an administrative hearing on the proposed merger before an administrative law judge. The FCC previously hadn't sought such a hearing since 2002 when it requested one for the proposed merger of EchoStar and DirecTV. In that particular case the two companies decided to drop the merger proposal.

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