AT&T Acquiring T-Mobile USA from Deutsche Telekom

Today, AT&T and Deutsche Telekom announced that they have entered into a definitive agreement under which AT&T will acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction currently valued at approximately $39 billion. The agreement has been approved by the Boards of Directors of both companies. Deutsche Telekom will have an ownership interest in AT&T of approximately 8 percent and a Deutsche Telekom representative will join the AT&T Board of Directors.

The acquisition is subject to regulatory approvals, a reverse breakup fee in certain circumstances, and other customary regulatory and other closing conditions. The transaction is expected to close in approximately 12 months and the government needs to approve the deal.

This is significant for a number of reasons listed in the announcement. Here's a couple that I believe are most significant:

• Addresses wireless spectrum challenges facing AT&T, T-Mobile USA, their customers, and U.S. policymakers. AT&T’s mobile data traffic grew 8,000 percent over the past four years and by 2015 it is expected to be eight to 10 times what it was in 2010. Put another way, all of the mobile traffic volume AT&T carried during 2010 is estimated to be carried in just the first six to seven weeks of 2015. 

• AT&T commits to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. This helps achieve the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.” T-Mobile USA does not have a clear path to delivering LTE.

Spectrum and coverage - both critical as bandwidths and connected devices continue to grow at incredible rates.

Just wondering....... will Verizon Wireless now make a bid for Sprint/Nextel?