AT&T announces deal to purchase T-Mobile

[Tilted]

AT&T and T-Mobile Merger to Create Industry Giant

AT&T plans to pay $39 billion to buy Deutsche Telekom's T-Mobile USA in a deal that is expected to attract intense regulatory scrutiny as it creates a new U.S. mobile market leader.

AT&T, the No. 2 U.S. mobile service, is looking to bolster its constrained network against a near insatiable appetite for videos and data from devices such as Apple's iPhone and iPad users.

But the world's largest deal announced so far this year, which will bump Verizon Wireless from its No. 1 U.S. position, could raise the ire of U.S. consumers and regulators as analysts expect it to result in wireless service price increases. Consumers currently look to T-Mobile USA for some of the best value wireless service rates.

This would be a pretty significant deal and $25 Billion in cash is a big number, though AT&T would seem to have the earning ability to pull it off. But, $40 Billion in synergies? I'd ike to know where they see that much coming from.

 

[Larry Gude]

AT&T and T-Mobile Merger to Create Industry Giant



This would be a pretty significant deal and $25 Billion in cash is a big number, though AT&T would seem to have the earning ability to pull it off. But, $40 Billion in synergies? I'd ike to know where they see that much coming from.

This stuff always amazes me. After essentially losing the IPhone to Verizon, AT&T had to do something and now, this seems so obvious.

Pop always sez 'hind sight is 20/20'

:shrug:

 

[Tilted]

This stuff always amazes me. After essentially losing the IPhone to Verizon, AT&T had to do something and now, this seems so obvious.

Pop always sez 'hind sight is 20/20'

:shrug:

I don't know that this particular move was obvious, but I think your basic point is apt - it's not exactly a huge surprise.

AT&T got a lot of mileage out of iPhone exclusivity - I'd argue it played a large role in saving AT&T as a dominant player in the Cell/Data service provider market (and its bottom line numbers wouldn't exactly put a strain on that argument). But, all good things come to an end at some point - and I'd expect the net adds numbers to turn around starting in Q1 2011 (i.e. AT&T will no longer be consistently kicking Verizon's butt in that department).

I'm not sure T-Mobile customers are gonna like this deal though and my gut tells me that it will eventually win regulatory approval, unless we get a tremendous public outcry against it (though regulators may impose some limited price controls as conditions for approval). If the powers that be can mostly rubber stamp an Exxon - Mobil merger, I would think they can mostly rubber stamp an AT&T - T-Mobile merger/acquisition. Of course, there's always the possibility that we get a Sirius - XM situation, where politics stalls the deal - but it isn't clear to me that politicians recognize their bread being better buttered by the likes of Verizon.

 

[Larry Gude]

I don't know that this particular move was obvious, but I think your basic point is apt - it's not exactly a huge surprise.

It's one of those things that become obvious, or, at least, much more plausible, in hindsight; logical moves and outcomes hidden in plain sight. Like Butler over Pittsburgh.

 

[Tilted]

It's one of those things that become obvious, or, at least, much more plausible, in hindsight; logical moves and outcomes hidden in plain sight. Like Butler over Pittsburgh.

And, in specific, the propriety of fouling an opposing player at half court when you're up by 1 with one or two seconds left...

Obviously good basketball strategy is that.

 

[Beta84]

I don't see how this is a good move. They'll get more coverage, but lose some T-Mobile customers who want to go cheaper. I guess they think it will steal customers from Verizon in their newly expanded T-mobile areas, but if people weren't going with the cheaper T-Mobile then what makes them think they'd pay more to go with AT&T?

 

[Tilted]

I don't see how this is a good move. They'll get more coverage, but lose some T-Mobile customers who want to go cheaper. I guess they think it will steal customers from Verizon in their newly expanded T-mobile areas, but if people weren't going with the cheaper T-Mobile then what makes them think they'd pay more to go with AT&T?

(1) Though I may think they overestimate the potential synergy value (I'm not familiar enough with T-Mobile's business, or probably even AT&T's for that matter, to have a definitive opinion about that), there should be little question that there is considerable synergy value.

(2) AT&T is looking for a quick way to add wireless service infrastructure and/or data service bandwidth. Data service is the growth aspect of the industry, and all the players are finding (or, will find) their capabilities in that regard stretched. The defining arena of competition in the foreseeable future between AT&T and Verizon will probably be the breadth (or depth, depending on how you want to look at it) of their respective data service capabilities. Such service will likely soon represent over 40% of their collective and respective revenues.

(3) They don't necessarily need to 'steal' customers from Verizon - T-Mobile already has a considerable number of customers. Other considerations aside, those customers have the potential to add significantly to AT&T's top and bottom lines (though, discounting other considerations, at something like $1,100 or $1,200 per existing customer, they'd perhaps be overpaying for them).

At first blush, this stikes me as a value-adding deal for AT&T, even if much of that net added value is jus positioning potential.

 

[Pete]

I think AT&T just wanted Catherine Zeta Jones.

 

[Larry Gude]

And, in specific, the propriety of fouling an opposing player at half court when you're up by 1 with one or two seconds left...

Obviously good basketball strategy is that.

I was in the car, listening and when they called the foul, I could not believe it. Refs weren't about to let their brackets go up in smoke. Then, the free throws, making one, then the foul call on Pittsburgh after the miss. I was just stunned. So, one ref had Butler.

Simply amazing.

 

[Beta84]

(1) Though I may think they overestimate the potential synergy value (I'm not familiar enough with T-Mobile's business, or probably even AT&T's for that matter, to have a definitive opinion about that), there should be little question that there is considerable synergy value.

(2) AT&T is looking for a quick way to add wireless service infrastructure and/or data service bandwidth. Data service is the growth aspect of the industry, and all the players are finding (or, will find) their capabilities in that regard stretched. The defining arena of competition in the foreseeable future between AT&T and Verizon will probably be the breadth (or depth, depending on how you want to look at it) of their respective data service capabilities. Such service will likely soon represent over 40% of their collective and respective revenues.

(3) They don't necessarily need to 'steal' customers from Verizon - T-Mobile already has a considerable number of customers. Other considerations aside, those customers have the potential to add significantly to AT&T's top and bottom lines (though, discounting other considerations, at something like $1,100 or $1,200 per existing customer, they'd perhaps be overpaying for them).

At first blush, this stikes me as a value-adding deal for AT&T, even if much of that net added value is jus positioning potential.

I guess if T-Mobile continues as it does and AT&T continues as it does and they're both profitable then it'll continue making money. Merging them together, I can see an enhanced 4G coverage area for AT&T since that was one of T-Mobile's selling points and AT&T's weak spots. So I can see that adding value to AT&T.

I haven't seen many commercials lately, but AT&T was pitching the "97% of America covered" shtick, but that was only with phone service. Verizon was countering with AT&T having very limited data coverage and AT&T would ignore the "data" part of that with their commercials. I suppose if this significantly increases their data coverage then this will be a huge win for them.

I think AT&T just wanted Catherine Zeta Jones.

can you blame them? plus they have some other hot chick in their 4G commercials now. The last celebrity I can remember of AT&Ts is Luke Wilson!

I was in the car, listening and when they called the foul, I could not believe it. Refs weren't about to let their brackets go up in smoke. Then, the free throws, making one, then the foul call on Pittsburgh after the miss. I was just stunned. So, one ref had Butler.

Simply amazing.

That game was insane. I've seen at least 3 or 4 games where these kids have made BONEHEADED plays at the very end that have decided games. That's why it's Madness!

 

[Tilted]

'We're Not Interested in Sprint': Verizon Wireless CEO

That doesn't surprise me.

 

[Tilted]

I was in the car, listening and when they called the foul, I could not believe it. Refs weren't about to let their brackets go up in smoke. Then, the free throws, making one, then the foul call on Pittsburgh after the miss. I was just stunned. So, one ref had Butler.

Simply amazing.

The whole thing was crazy - just when you think you've seen it all, the Universe reminds you that you surely have not.

I thought the foul called at half court against Butler had to be called - the Butler player didn't leave the officials much choice. I'm not quite as convinced about the last one called under Pitt's basket, but it was probably the right call. Again, the mistake was on the (Pitt) player.

 

[Tilted]

AT&T has cried uncle (to the all-powerful Uncle Sam) and is dropping its bid to acquire T-Mobile. Refresh my memory, did we let Exxon and Mobil merge, or did we squash efforts to put together that super-evil-mother-of-all-corporate behemoths like a bug?

AT&T Ends T-Mobile Deal, Citing Federal Objections