FCC Blocks AT&T/T-Mobile Merger

[work2do]

Seems T-Mobile will be gone one way or another:

When AT&T agreed to buy T-Mobile USA from Deutsche Telekom in March, the deal looked like a happy ending for T-Mobile, which had been bleeding customers and battling against declining sales. The company has struggled to retain and add new customers as rivals AT&T, Verizon and Sprint have attracted new mobile phone shoppers with popular handsets like the iPhone and the promise of faster networks and data services.

Over the last eight quarters, the mobile industry overall has added a net 33 million customers in the United States; T-Mobile has added only 89,000 of those.

A dissolution of the merger could leave T-Mobile in a much worse position than it was prior to March, when the acquisition was first announced. Analysts say that since then, the company likely froze any major negotiations with smartphone and tablet manufactures like Apple to avoid interfering with any deals underway between AT&T and those hardware vendors.

That could severely limit T-Mobile’s ability to lure away new customers from competitors over the coming quarters if the merger is abandoned. But the spectrum, or cellular airwaves, that T-Mobile would receive in a break-up from AT&T could help the company, perhaps making it attractive to another company or investment group looking to get into the cellular and mobile broadband business.

Deutsche Telekom has made clear that it no longer want to be in the mobile phone business in the United States, saying it will stop investing in cellular infrastructure here to concentrate on its European operations.

If the merger falls through, the German company may decide to spin off the unit as an independent entity, sell it at a less attractive price to a rival like Sprint Nextel or sell it off in pieces. The proceeds from the sale had been earmarked to pay down debt and buy back stock.