Though signs of optimism had been flickering for weeks, AT&T announced their decision to drop its proposal to merge with T-Mobile on Monday, citing pressure from the Federal Communications Commission and the Department of Justice. The consequences of AT&T last minute cancellation are many. Dan Frommer lists several in handy bullet point format. A sampling:
- AT&T will have to pay T-Mobile a $3 billion breakup fee, plus a large amount of wireless spectrum, and will enter into a roaming agreement with T-Mobile.
- AT&T will have to figure out a new way to improve its often-lousy wireless network. That was one of its big pitches: That having access to T-Mobile’s airwaves would mean better wireless services for AT&T and T-Mobile customers. Now it’s back to the drawing board.
- T-Mobile will have to figure out a new path to 4G LTE. The airwaves, cash, and roaming deal it’s getting from AT&T might help.
An excerpt from AT&T's announcement reads:
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. 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.