Failed T-Mobile USA merger would cost AT&T $6B

If government regulators in the United States reject AT&T’s proposed $39B purchase of T-Mobile USA from Deutsche Telekom, the U.S. carrier could owe the German company up to $6B in assets, Reuters reported today.

The agreement in place awards Deutsche Telekom $3B in cash, $2B in spectrum and a $1B roaming agreement in the event of the merger’s failure. Based on past spectrum sales, analysts estimate the spectrum agreement to be worth about 10Mhz, ostensibly the minimum to offer high-speed LTE service to customers.

By agreeing to such a high cancellation fee, AT&T appears to be supremely confident that the merger will be approved, even in the face of vocal opposition from consumers, competitors and the U.S. Senate.

Were the merger to be successful in winning approval from the Federal Communications Commission and the Department of Justice, the newly formed wireless company would be the largest in the United States and the only one to offer a GSM-based network.

Via Reuters

Photo: Android Community

Author: Matthew Ismael Ruiz

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