AT&T Inc. this week dropped its $39 billion bid to purchase T-Mobile Inc. from Deutsche Telekom amid opposition from the U.S Department of Justice and the Federal Communications Commission.
AT&T argued that the purchase of T-Mobile was integral to investing to the future deployment of wireless spectrum that would reach most Americans.
“The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry,” AT&T said in a statement.
“It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.”
Government agencies disagreed however that the merger would create jobs and lower wireless pricing per AT&T’s internal projections.
In addition to opposition by the U.S. government, fourth-place wireless operator Sprint Corp. largely opposed the merger as anti-competitive.
The purchase of T-Mobile would have created the largest wireless telecommunications provider in the U.S.
AT&T will pay a $4 billion break-up fee to T-Mobile, which will help the latter to compete against No. 1 carrier Verizon Wireless and subsequently AT&T itself.
AT&T holds 96 million subscribers in the U.S., while T-Mobile holds 33 million U.S. subscribers.