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AT&T - T-Mobile Merger

Acquisition Timing Provides Time to Competitors

Boston, MA - April 5, 2010 – On March 20, 2011, AT&T announced an agreement to acquire T-Mobile USA from Deutsche Telekom and estimated 12 months to complete the acquisition. However, based on recent telecom mergers and acquisitions, Strategy Analytics calculates that it will take at least 18 months to complete the approval process, including:
  • Judiciary and Commerce committee hearings in both the House and Senate;
  • Regulatory and Attorney General inquiries, state by state;
  • Department of Justice investigations;
  • Federal Trade Commission questions; and
  • Federal Communications Commission final approval.
The Strategy Analytics Wireless Operator Strategies (WOS) service Insight, "AT&T T-Mobile Acquisition: How long will it take to close?" predicts an exhausting process for AT&T. AT&T promises benefits from accelerated broadband deployment of 4G LTE (Long Term Evolution). However the deal has provoked a wave of criticism from some competing operators notably Sprint and Clearwire. Operators Verizon, MetroPCS and CenturyLink are watching from the sidelines.

"Going forward, new competition for AT&T may come from emerging cable MVNOs who resell wireless service from Sprint/Clearwire and even LightSquared. Cox Communications is building its own wireless broadband network. Even Google is experimenting with high-speed wireless network operations. Serious new competitors are on the horizon," notes Sue Rudd, Director, Service Provider Analysis (SPA) at Strategy Analytics. "However, AT&T must prove that the deal does not have an immediate anticompetitive impact."

AT&T has already indicated willingness to meet state-by-state requirements and the stock purchase agreement states that AT&T is prepared to divest up to 40 percent of the T-Mobile subscriber base, i.e. 13.6 million connections, to resolve Anti-Trust issues. Strategy Analytics believes that the deal will ultimately be approved.

According to Phil Kendall, Director, Strategy Analytics Global Wireless Practice, "This deal challenges Sprint, Clearwire and LightSquared and raises the stakes for Verizon Wireless. As described in an earlier Strategy Analytics report, 'AT&T's T-Mobile Acquisition Accelerates LTE Deployments, Puts Pressure on Sprint,' this deal will probably increase mobile broadband competition in the top tier of carriers. The long period required for regulatory approval and integration work means that Verizon still has time to strategize for remaining ahead in 4G deployment and innovation."

Press release contact

Sue Rudd
Phone number: +1 617 614 0709
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