On March 20, 2011, AT & amp; T announced that they would buy T-Mobile USA. On August 31, 2011, the Antitrust Division of the US Department of Justice officially announced that it would seek to block the takeover, and file a lawsuit for such securities in federal court. Bid left by AT & amp; T on December 19, 2011.
Video Attempted purchase of T-Mobile USA by AT&T
Announcement
AT & amp; T announced its intention to purchase T-Mobile USA for $ 39 billion from Deutsche Telekom. The deal will come with 33.7 million subscribers, making AT & T the largest mobile phone company in the United States. If the transaction is complete, AT & T will have 43% of the US mobile phone market share, making AT & amp; T is much larger than its competitors.
On March 20, 2011 Deutsche Telekom AG received a share offering and cash purchase worth US $ 39 billion from AT & amp; T Inc. for T-Mobile USA, Inc.
According to an industry analyst, after the introduction of the iPhone in 2007, T-Mobile USA began losing profitable contract customers, dropping to 78.3 percent of subscribers in 2010, compared to 85% in 2006. The high churn rate of T-Mobile USA 3.2% compared to 1.2% in Verizon Wireless and AT & amp; T Mobility, the investment required in network upgrades and spectrum purchases is too risky given the decline in contract customers, strengthening Deutsche Telekom's decision to sell.
Maps Attempted purchase of T-Mobile USA by AT&T
Review of Antitrust rules and concerns (DOJ & amp; FCC)
This purchase is required to undergo a regulatory review that two companies are expected to take at least 12 months. The agreement requires the approval of the US Department of Justice and the Federal Communications Commission. The FCC handles reviews under WT Docket No. 11-65.
The Wall Street Journal reported on 11/25/11 that AT & amp; T has taken $ 4 Billion write-off ($ 3B in cash, $ 1B in spectrum value) in Q3 of 2011 to anticipate a failed deal.
Department of Justice
United States v. AT & amp; T, T-Mobile, and Deutsche Telekom are lawsuits filed by the US Department of Justice's Antitrust Division that seeks to block the merger of AT & amp; T Mobility and T-Mobile USA.
Had the purchase been completed, AT & T would have a customer base of around 130 million users, making AT & T the largest wireless carrier in the United States. Regulators question the impact that will occur on competitors and consumers, with critics stating that the deal will increase prices for customers; Public Interest interest groups say mergers will lead to "higher prices, fewer choices, [and] less innovation". Chief executive of AT & amp; T Randall Stephenson states that mergers will improve network quality and will lead to substantial savings for the company. AT & T stated that they had to sell some assets to get approval from regulators, but they had done their "homework" on the rules.
FCC's 180 day countdown timer
On August 26, 2011, the "FCC 180 day timer" resumed on day 83. This implies that around December 4, 2011 the FCC will announce their decision regarding T & T purchases from AT & T.
tmonews.com reports that the FCC opposes the merger. Both stories (November 22, 2011 at 18:22 EST) and (November 22, 2011, 3:36 pm EST) using the same source material from the Wall Street Journal, AT & amp; T Faces This New Barrier $ 39 Billion T- Buy Phones in Deep Jeopardy when FCC Slaps on Extra Review (November 23, 2011). However, Bloomberg Businessweek's report cited Associated Press, The FCC Chairman opposed the takeover of AT & amp; T from T-Mobile , indicating that it may be more accurate to say that the chairman of the Federal Communications Commission, Julius Genachowski, was opposed.
The November 26, 2011 article in the Wall Street Journal ("AT & amp; T Bickers With FCC on Merger Review" by Greg Bensinger) explains the logic of AT & amp; T against the DOJ courts when withdrawing their application from the FCC: they think they will get a new 180-day countdown timer if it is re-applied. However, if after re-applying the balance of the original original countdown timer will be used, the withdrawal date of November 23, 2011 will leave the balance for about eleven days remaining.
The FCC released "Order Dismissing Applications and Staff Report: Staff Analysis and Findings (DA-11-1955A2.pdf)". From the end of the main section:
Commission staff found that the Petitioners had failed to bear their burden by proving that the proposed transaction, on balance, would serve the public interest. After careful examination summarized in this document, the staff concludes that significant hazards to competition are likely to occur, especially in the form of increased prices for consumers, reducing incentives for innovation, decreasing consumer choice. In addition, there are serious allegations about other dangers that require further investigation. Further, staff find that most of the benefits proposed by the Applicants are not adequately supported by the data provided, may be achieved through means other than the elimination of competitors, or otherwise not recognizable by the Commission's general interest standards. Therefore, the staff recommends that the Commission appoint the proposed transaction to hear in accordance with § 309 (e) of the Communications Act.
Senate trial
The Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a trial on AT & T's acquisition of T-Mobile USA in May. During the session the senators questioned company CEOs about the impact of mergers on competition and other issues. At one point during the trial both companies denied that they were competitors.
Senator Amy Klobuchar asks if AT & T is ready to offer its customers T-Mobile's current pricing plan. Stephenson said AT & T would honor existing T-Mobile contracts, even when customers are updated, as long as they buy the same phone.
Gigi Sohn, president of Public Knowledge, testified at the hearing. Sohn stated that at least 1,000 people have signed the group's petition against the merger and that more than 5,000 people have written to the Federal Communications Commission against the deal.
Reception
Reactions to the proposed merger result in support and opposition among various groups and communities.
This merger garnered support from a large number of civil, environmental, and business civil rights organizations. These include NAACP, Latin American Citizen League, Gay & amp; Lesbian Alliance Against Defamation (GLAAD), and Sierra Club. Labor organizations such as AFL-CIO, Teamsters, and Communications Workers of America also voiced support for mergers. These organizations demonstrate AT & T's commitment to labor, social, and environmental standards. Many of these organizations also mention how mergers might accelerate the 4G wireless deployment, thus helping underserved communities such as rural areas and disadvantaged urban communities. NAACP, which received a $ 1,000,000 donation from AT & amp; T in 2009 said the merger would have "increased [d] increased access to affordable and sustainable wireless broadband services and in turn stimulated [d] job creation and civil engagement across our country."
On August 2, governors from 26 countries have written letters supporting mergers. On July 27, the attorneys of Utah, Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, West Virginia, and Wyoming sent a joint support letter to the FCC. In August 2011, state regulatory agencies in Arizona and Louisiana have approved the acquisition.
A diverse group of industries and public interest organizations opposed the merger of AT & amp; T with T-Mobile. While the AT & amp; T, Randall Stephenson, expressed confidence in a deal agreed upon by the benefits to the public to broaden wireless access and a relatively strong competition in the wireless market, analysts said the deal had a good chance of being rejected by federal regulators.
Consumer groups include Public Knowledge, Consumer Union, Free Press and Access Media Project openly opposed to the merger of AT & amp; These groups have influence with the Democrats in the Federal Communications Commission and in Congress. These organizations fear that the merger will raise prices and hamper innovation by consolidating so many wireless industries into one company. The Free Press and Public Knowledge have begun a letter-writing campaign against the deal.
Internet companies are generally skeptical of merging because it will leave them with fewer disputing parties to negotiate with to get their content and apps to customers. Mergers might leave them hanging on only two: AT & T and Verizon. Computers & amp; The Communications Industry Association (CCIA), which counts Google, Microsoft, Yahoo and eBay among its members, opposes the merger. "An agreement like this, if not blocked by antitrust reasons, is a deep concern for all innovative businesses that build everything from apps to handsets It would be hypocritical for our nation to talk about letting go of innovation on one side and then standing as a threat to innovation like this is proposed, "said Ed Black, head of CCIA.
The Rural Cellular Association (RCA), a trade group representing about 100 mobile operators located in rural areas, expressed opposition to the proposed merger between AT & amp; T and T-Mobile, said that the merger would hamper competition, undermine innovation, and lead to higher prices.
Sprint Nextel also announced its opposition to the merger. Sprint said the deal would greatly reduce competition in the US mobile phone industry.
Consumer effects
Frequency
AT & amp; T and T-Mobile use different 3G radio frequencies on their wireless networks. This could mean that T-Mobile customers should eventually replace their 3G phones once this merger is completed. Some users refuse to upgrade their phones due to this issue. AT & amp; T plans to divert T-Mobile users to different 3G frequencies and that T-Mobile users need to buy a new phone. AT & T claims that this shift will spread over several years to allow consumers to change phones when they normally do so.
Leaking documents
On August 11, 2011, a lawyer involved in a merger accidentally posted a document regarding the merger of AT & T T-Mobile that could undermine the reason for AT & amp; T has previously stated for merger.
Merger bid withdrawal
On December 19, 2011, AT & T announced that it would permanently terminate the merger offer after a "thorough review of its options" which included negotiations to sell most of T-Mobile's assets to Leap Wireless in an attempt to allay concerns by the FCC about monopolies, but to no avail. The announcement includes a statement that the acquisition failure will increase costs to consumers and undermine innovation in the wireless market. In accordance with the original acquisition agreement, Deutsche Telekom will receive $ 3 billion in cash as well as access to the wireless spectrum of AT & amp; T-held for $ 1 billion.
According to the February 2012 regulatory filing, AT & amp; T CEO Randall Stephenson was cut by "more than $ 2 million" in response to the effects of failed attempts at AT & amp; T. Total compensation for 2011 was $ 22 million, a decrease of 18.5% from the $ 27 million he received the previous year.
References
External links
- WT Docket No.11-65, Federal Communications Commission, General Counsel Office, Transaction Team
Source of the article : Wikipedia
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