With the news from the AT&T announcement on Thanksgiving morning where AT&T said they were withdrawing their T-Mobile deal from the FCC, it now appears that they are not abandoning the deal, but altering the proposal to make it more satisfactory to the Federal Communications Commission (FCC). While it was first reported as been ended, it now appears that they are reworking the deal to see if changing things around will make a difference in how it is being viewed by the regulatory body. It may also be seen differently by the Department of Justice (DOJ) who is currently opposed to the deal and has filed a lawsuit in an effort to stop the acquisition by AT&T.
While the T-Mobile deal looked to be up in the air, it now looks like AT&T is reworking the deal in an effort to increase the number of assets that are sold as part of the T-Mobile deal in an effort to satisfy the critics of the deal. Specific numbers are not known, but are estimated to be in the 40% range and would be a large increase.
With that large of a percentage of assets to be sold, AT&T may run into problems trying to find purchasers given the state of the economy and the volume of assets which would have to be sold off. It could be that this is the last attempt which might succeed for AT&T, but there is no guarantee that it will persuade regulators to accept the deal.
AT&T really needs for this deal to go through and that explains the reported increase in the selling off of assets in an effort to make it more palatable to regulators. AT&T wants the increased wireless network presence that T-Mobile USA offers them and it will go a long ways to improve their services along with expanding the customer base to become the largest wireless carrier in the US. Whether the proposed changes are going to be enough is not known and it will have to be seen as to how well it will be received.
With the T-Mobile deal by AT&T, some are starting to wonder if T-Mobile can survive if the deal does not go through. T-Mobile has lost some of their identity as many have been assuming that the deal would go through and have not considered T-Mobile in the future. It is because of that one item, that T-Mobile looks like it will be struggling for a while if the deal does fall apart for AT&T.
Options for T-Mobile are not all bad as they are getting $3 billion in a settlement because of the failed T-Mobile deal which would help them recover, but there are still a number of other issues for them. One is the lack of the Apple iPhone and that lacking puts them at a disadvantage for the future. The other problem is the lack of an LTE expansion plan given that the others in the top four have their plans in place and are moving forward.
We can hope that this is settled by the end of the year either for or against AT&T and the T-Mobile deal. For now, we have to let things play out in the courts.
Walter Benson
