AT&T pays $3bn+ to terminate T-Mobile deal

AT&T and Deutsche Telekom have terminated the agreement on the sale of T-Mobile USA to AT&T. As a result, AT&T will pay Deutsche Telekom the break-up fee agreed in the contract; a record $3bn cash. In addition, it contains a large package of mobile communications spectrum and a long-term agreement on UMTS roaming within the U.S. for T-Mobile USA.

Both companies are in agreement that the broad opposition by the US Department of Justice and the US telecommunications regulator (FCC) is making it increasingly unlikely that the transaction will close. Both companies are of the opinion that important arguments in support of the transaction have been ignored, such as the significant improvement in high-speed mobile network coverage for the US market, as well as the positive employment effects. In addition there was no indication that either authority would move away from its non-supportive stance in return for concessions from the parties in terms of the scope and structure of the transaction.

As part of the break-up fee, T-Mobile USA will receive a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets (Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle).

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