AT&T to buy T-Mobile US unit
By Peter Svensson |
March 22, 2011, Tuesday
|
Print Edition
Print Edition
AT&T Inc has said it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at US$39 billion that would make it the largest cellphone company in the United States.
The deal would reduce the number of national wireless carriers from four to three. It also removes a potential partner for Sprint Nextel Corp, the No. 3 carrier, which had been in talks to combine with T-Mobile USA.
AT&T is now US's second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless' 102 million. The combined company would serve about 43 percent of US cellphones.
Because of the long regulatory process, Dallas-based AT&T expects the acquisition to take a year to close.
To mollify regulators, AT&T said in a statement on Sunday that it would spend an additional US$8 billion to expand ultrafast wireless broadband into rural areas. Instead of covering about 80 percent of the US population with its so-called Long Term Evolution, or LTE network, AT&T's new goal would be 95 percent, it said.
AT&T would pay about US$25 billion in cash to Deutsche Telekom, Germany's largest phone company, and stock that is equivalent to an 8 percent stake in AT&T. Deutsche Telekom would get one seat on AT&T's board.
Like Sprint, T-Mobile has been struggling to compete with much larger rivals AT&T and Verizon Wireless, and its revenue has been largely flat for three years. Bellevue, Washington-based T-Mobile USA's subscriber count has stalled at just under 34 million, though it posts consistent profits.
The deal has been approved by the boards of both companies.
The deal would reduce the number of national wireless carriers from four to three. It also removes a potential partner for Sprint Nextel Corp, the No. 3 carrier, which had been in talks to combine with T-Mobile USA.
AT&T is now US's second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless' 102 million. The combined company would serve about 43 percent of US cellphones.
Because of the long regulatory process, Dallas-based AT&T expects the acquisition to take a year to close.
To mollify regulators, AT&T said in a statement on Sunday that it would spend an additional US$8 billion to expand ultrafast wireless broadband into rural areas. Instead of covering about 80 percent of the US population with its so-called Long Term Evolution, or LTE network, AT&T's new goal would be 95 percent, it said.
AT&T would pay about US$25 billion in cash to Deutsche Telekom, Germany's largest phone company, and stock that is equivalent to an 8 percent stake in AT&T. Deutsche Telekom would get one seat on AT&T's board.
Like Sprint, T-Mobile has been struggling to compete with much larger rivals AT&T and Verizon Wireless, and its revenue has been largely flat for three years. Bellevue, Washington-based T-Mobile USA's subscriber count has stalled at just under 34 million, though it posts consistent profits.
The deal has been approved by the boards of both companies.
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