AT&T Gives Up Bid for T-Mobile

Mitchell Hartman Dec 20, 2011

Jeremy Hobson: AT&T has dropped plans to buy rival T-Mobile in what would have been a $39 billion deal. The government was opposed to the deal because of anti-trust concerns.

The details from Marketplace’s Mitchell Hartman.


Mitchell Hartman: Call it “merger hubris.” AT&T insisted the deal would improve service for consumers. And the company was so confident it could get approval from anti-trust regulators, it promised to pay T-Mobile $3 billion if the deal fell through.

Maggie Reardon at CNET.

Maggie Reardon: They contribute a lot of money and do a lot of lobbying and they thought they had a good argument. But ultimately regulators looked at this and said, “it’s just too much concentration in the market.”

With T-Mobile, AT&T would have had nearly half of U.S. wireless customers. And, the company also would have picked off a rival that was undercutting them in the market with lower prices, says Carl Howe at the Yankee Group.

Carl Howe: Eliminating this aggressive competitor was really what sent the deal south, because if you eliminate the low-cost player, then prices go up.

In August, the Justice Department sued to block the deal. And when AT&T decided the merger was doomed, it made the costly decision to back out.

I’m Mitchell Hartman for Marketplace.

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