The big news in the telecomm world this week is the abandonment of AT&T’s efforts to merge with T-Mobile. The $39-billion mega merger would have created the nation’s largest service provider, but had become entangled in Department of Justice and Federal Communications Commission investigations and anti-trust concerns.
While opponents of the merger are pleased with this announcement, ditching the merger comes at a significant cost for both AT&T and T-Mobile, not to mention customers who were looking forward to the expanded network. AT&T will be forced to shell out a hefty fee of $4 billion of cash and assets to T-Mobile’s parent company Deutsche Telekom. For T-Mobile, the fourth-largest national cellular provider, the failed merger leaves the firm more likely for a second-round acquisition by another interested service provider.
Although the DOJ and FCC had legitimate concerns and questions about the proposed merger, the most significant end cost may end up on consumers’ shoulders As more people use mobile devices to surf the web, send emails and stream video, broadband demand is continuing to skyrocket. The merger of AT&T and T-Mobile would have meant more data resources for more consumers.
I have no doubt that both AT&T and T-Mobile will look for other partners, and I’ll be eager to see what deals are ahead for them in the future. What are your thoughts?