US communications giant AT&T has moved to protect itself from future problems of spectrum exhaust resulting from burgeoning demand for mobile broadband by acquiring rival mobile operator T-Mobile USA from Deutsche Telekom in a cash-and-stock deal currently valued at approximately $39 billion. The pair say the transaction enhances network capacity, output and quality in near term for both companies’ customers
AT&T is committing to a significant expansion of robust 4G LTE (Long Term Evolution) deployment to 95 per cent of the US population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. AT&T sees this as assisting 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.
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”
Deutsche Telekom Chairman and CEO René Obermann said the two companies’ common network technology made a logical combination and provided an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices.
As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that, based on the terms of the agreement, would give Deutsche Telekom an ownership interest in AT&T of approximately eight per cent. A Deutsche Telekom representative will join the AT&T Board of Directors.