AT&T drops $39B bid to buy T-Mobile; ‘duopoly’ averted


The company said the deal would have solved that problem for a time, and without it, “customers will be harmed and needed investment will be stifled.”

AT&T said it will continue to invest, and it called on the government to quickly approve its purchase of unused spectrum from Qualcomm Inc. and come up with legislation to meet the nation’s long-term needs.

FCC Chairman Julius Genachowski said the commission agreed with AT&T that Congress should authorize an auction for additional spectrum. The FCC has proposed persuading television stations to give up their airwaves in exchange for sharing in auction proceeds.

Besides such an auction, AT&T also could buy spectrum from satellite TV operator Dish Network Corp., which could require an FCC waiver because this spectrum is licensed for satellite use.

Many people believed that AT&T had overstated the spectrum crisis.

AT&T already has an ample supply of unused wireless spectrum that it plans to use to expand its network over the next several years. And much of T-Mobile’s spectrum is already in use, so the deal wouldn’t have resulted in fresh airwaves becoming available. Furthermore, AT&T has made great strides in addressing network congestion in such cities as New York and San Francisco not by tapping its unused spectrum, but by upgrading its cell-tower equipment.

Moffett said AT&T’s spectrum needs aren’t so grave that it needs to make a large acquisition right away.

The decision to end the bid could be a bigger problem for T-Mobile than for AT&T. Deutsche Telekom has been eager to sell T-Mobile and isn’t keen on investing more in the company, which has seen revenue decline slowly with the flight of higher-profit contract customers.

Besides missing out on many of the hottest smart phones, T-Mobile has stuck to updating its existing 3G network to achieve 4G speeds.

By contrast, competitors have moved to all-new networks that use LTE, or long-term evolution, technology specifically designed to carry data. Both AT&T and Verizon are building LTE networks, and Sprint intends to use the technology, too.

Still, Moffett believes it’s too soon to write off T-Mobile, saying it has a good network with lots of room for more customers.

“I think they could surprise some people and be a more important force in the market than people are giving them credit for,” he said.

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