Nov 29 AT 8:58 AM Anthony Domanico 55 Comments

AT&T proposes selling customers and spectrum to Leap Wireless to save T-Mobile deal

att-tmobile

The proposed merger between AT&T and T-Mobile USA just gets more and more interesting. The deal has reached the point where AT&T will need to make several concessions if it is to have even a remote chance of success against a sea of litigation. This will include selling spectrum and customers to smaller, regional wireless companies, who would least likely benefit from the deal going through.

The New York Times reported late last night that AT&T has concocted an 11th hour plan it hopes will spur the Justice Department to drop their lawsuit that seeks to stop the deal in its tracks. Under the new proposal, AT&T would sell off a mixture of T-Mobile’s spectrum and customers to Leap Wireless, which runs Cricket and Jump Mobile. Though AT&T declined to comment as to what the mix of spectrum and customers would be, The Verge goes on to speculate that the selloff would largely lean towards customers, since AT&T’s purchase of T-Mobile was intended to build up AT&T’s spectrum so that it could properly roll out an LTE network.

Facing the need to pay an exorbitant amount of money to Deutsche Telekom as a break-up fee if the deal doesn’t go through, AT&T is doing all it can to ensure that the deal goes through without too many hitches. The Leap Wireless deal can be viewed as a last ditch effort to push the deal through the US government, and it has the potential to be exactly what the deal needed to move forward.

Optimism about the deal took a turn for the worse over the holiday weekend when AT&T announced it was withdrawing the deal’s application to the FCC and that it was charging $4 billion against its earnings to be able to pay a break-up fee should the deal get rejected. With the announcement of a potential Leap Wireless deal, however, it seems the optimism is heading back in the positive direction, with the lawyers who will be handling the merger case now putting the chances of success between 60 and 70 percent.

It seems that AT&T was at least partially telling the truth when they disclosed that the deal was largely made to bolster AT&T’s spectrum in the impending LTE showdown with Verizon and Sprint. If the deal is allowed to go through, several of T-Mobile USA’s customers could become part of a bolstered Leap Wireless, which would become the nation’s 4th biggest carrier.

What do you guys think? Will the deal be more likely to succeed with AT&T’s partnership with Leap Wireless? We know you T-Mobile USA customers were not too keen on becoming part of AT&Ts network, but aren’t you even less excited to become part of Leap Wireless?

Via: The Verge

Source: New York Times

Anthony loves all things technology, from hardware to apps and games. You can connect with him via Google+ or Twitter by clicking one of the fancy doo-dads above.

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  • Chad

    I swear if my family and I are divested to Leap..I guess i’ll be preordering the Galaxy Nexus on VZW soon instead of importing the HSPA+ version, either way I’m getting a Galaxy Nexus lol

    • Galen20K

      ditto, I’m out if they sell to Leap and I’m going to Verizon.

    • Dirty_Azkals

      Ha, hope the FCC sees all these comments. Obviously if people wanted to be Leap Customers they would have joined them first.

      What’s the point of transferring customers over if they are going to leave? Guess it looks good on paper.

  • kest009

    what network does Leap run on? GSM or CDMA?

  • http://www.lifequill.com Canterrain

    Hi customers, I’m glad you made it to the meeting.

    Today I’d like to talk to you about your future with us. See we’ve been bought out. But don’t worry, you’re not coming with us! Instead, you’ll be sent to an even smaller company with less coverage and fewer if any decent phone choices!

    Uh.. Hello? Where are you going? Guys? Oh real mature!

    • kest009

      true, why would anyone with Tmo want to go to an even smaller carrier with a network that isn’t compatible with their current phones?? i would probably take my business to AT&T…

      • BiGMERF

        im pretty sure that customer sell off pertains to there prepay users.. att will have no problem swallowing up those with tenure on tmo..

        • kest009

          ahh, ok

          • http://www.anthonydomanico.com Anthony Domanico

            Again, we don’t have details, so we don’t know for sure.

      • tengo

        Maybe that is AT&T’s devious plan — by having some TMo customers moved to Leap, it will make them see that AT&T is a better option and they will want to give AT&T their business :)

  • BiGMERF

    they run on cdma. att is crazy if they think they can just sell millions of gsm users over to leap… No way

    • http://www.mlswanson.com SparkyXI

      Correct. All customers that are forced to move to Leap from the T-Mob will be *required* to have new phones because of the difference in technology (GSM -> CDMA). How’s that going to work? (answer: It won’t.)

      • Baconator

        I am pretty sure Leap would give them new phones, maybe not good ones but they would get phones.

  • Galen20K

    This is a TERRIBLE idea, eff Leap Wireless I will not be taken from my wonderful Magenta and folded into Leap. If this idea passes I will head straight to Verizon that day with absolutely no hesitations. Almost as bad as if Att took over.

    This madness has to stop.

  • Charlesbrown79

    I particularly do not see how this will help consumers in any way. A lot of GSM customers having to buy a CDMA phone? Wasn’t one of the reasons DOJ got involved because of the hardship it could cause consumers? I’d hate to go to Verizon because god knows what I’ll pay for one line there for the amount. I am paying for two lines on T-Mobile. Not to say anything bad about Sprint, but their service is horrid where I live. I’m going back to the telegraph or if anyone has some extra cans and a ton of string to spare.

    • Futureboy

      Beyond the hardship to customers, wasn’t one of the main reasons the DOJ was involved is that it would give AT&T a monopoly on GSM in the US?

  • Ironzey

    Looks like I’m going to stay a T mo customer. YAY!

  • Dlux

    They really need to let this go. Seriously. Not a good idea.

  • pitacrisps

    If this happens, Verizon and Sprint will only grow larger.

  • ranwanimator

    As has been mentioned previously, Douche Telecom does not want to be in the US any longer. Even if the AT&T deal doesn’t go through, DT still wants out. They will sell to someone else. It’s only a matter of time.

    Any way you look at it, T-Mo customers lose.

    • Futureboy

      I think androidandme should buy T-Mobile. C’mon guys, know any investors with deep pockets? Can’t you guys scrape together a few billion? Check your pockets and couch cushions! C’mon, it’s for the good of the community!

  • Wunako

    wow… i can not stand cricket, sure its cheap as far as the bill goes but the phones are all complete sh** they dont have any exclusive phones as what the DOJ was defining as a smaller competative carrier. And worse off, theyre service is awfull.

    its not that im whinning i just dont see how this would even be considered a good move for consumers, and either way we will still lose a GSM carrier. At this point im just gonna ride out the Tmo wave, and pay any ETF and get out before the merger take my business else where (aka not at&t) who knows maybe sprint has there stuff together by then

  • rantmo

    Ugh. If I get sold off to Leap I’ll probably end up over at US Cellular. They’re small but they’ve got a good reputation and they’re upgrading their network, which is encouraging even if Chicago (our shared home base) isn’t on the first list for upgrading. I don’t know why they never start here, hell they were based here before they actually had service here.

  • Topher Campbell

    How does that change the fact there will be one gsm based carrier, sound like a monopoly to me still

  • http://androidandme.com Taylor Wimberly

    So who’s buying T-Mobile when this deal falls apart?

    • Shackled

      No one, part of the deal is that if the purchase doesn’t go through AT&T will have to pay T-Mobile $3 Billion in cash and close to another billion in airwaves and roaming agreements. So if things go right the merger falling through might be the pick me up T-Mobile (US) needs to stay competitive.

      • Chad

        I think someone definitely will even if all of that happens Shackled, that money will be going to DT which has already said several times that they are finished with the US cellular market, TMO-USA will probably keep the airwaves as an incentive for the next interested buyer..I’m hoping for someone with stability to buy El Goog would be nice but highly doubtful.

      • http://www.anthonydomanico.com Anthony Domanico

        You’re making a fatal logic flaw in your assumption. AT&T will have to pay DEUTSCHE TELEKOM, not T-Mobile USA. DT will not pass that through to T-MO

        • John Walker

          Agreed, DT will dump that money back into their European markets and TMO will still be failing. I’m not sure anyone but AT&T WANTS to buy TMO at this point. It would be interesting to see if a group of private investors or a tech firm could cough up the cash to make the purchase when the AT&T deal falls through. Who do you think would be first in line, Facebook or Google?

          • http://androidandme.com Taylor Wimberly

            If the Justice Department blocks AT&T from purchasing TMO, do you really think Google would be allowed hah?

          • Shackled

            Taylor, I think the issue with AT&T buying it is that it would result in one company (almost) having a monopoly over GSM spectrum. Where as if Google buys it there would still be two major competitors.

          • Chad

            I was thinking the same, The government just wants to make sure overall that there is still competition in the US wireless game they know with an AT&T buyout they would lose a major player but if Google bought them they probably would have an easier time being approved because it keeps T-Mobile in the game and just as competitive. The only reason I can see Google being blocked is just b/c they are who they are – a BIG corp and also the fear of just an all android lineup and not giving consumers choice. Otherwise The Googorola deal is being passed through and I would’ve thought that deal would be blocked before a Google and T-Mobile deal would. There is still interest I read somewhere that DT was talking to 4 other major buyers before the AT&T deal struck so I’m sure we have some majors watching this very closely

          • Dirty_Azkals

            I just got an erection of Google buying them lol. Most their partners phones are GSM builds first anyways them CDMA. Android phones wouldn’t have that damn European/Asia lag if coming to the US last. Actually getting the Samsung Galaxy 3 or the latest HTC phones first. Multi phone nuts would benefit since your using one SIM for multiple phone. Google’s money can really make a difference for T mo.

        • http://www.lifequill.com Canterrain

          The other flaw in the logic is that $4 billion is enough to revitalize a cell phone company. It’s not. Tmobile raises and spends about $4 to $5 billion in a single quarter. Just look at their Q3 results. About $5 bill in revenue, $233 million in profit. So even if they did get the money it would help them for half a year at best.

  • ndub21

    I have AT&T right now and I would be fine with T-Mobile being acquired. I am not fine, however, with these absurd legal costs. I know this is being paid for by the AT&T subscribers and I’m not OK with footing a $3 Billion bill or whatever it is. I do really like T-Mobile’s embrace of Android though. They were the carrier that brought Android out in the first place. It would kinda sadden me to see them go though, since for some reason they seem less evil than AT&T and Verizon.

    • rantmo

      That bill is AT&T’s own doing. If they have to pony it up, it’s because they got cocky and then got slapped for it.

  • Ben Hayden

    I haven’t had a huge issue with the merger. Because if it means a better network connection and larger footprint i don;t have much of a problem with that

    • Calvin Jackson

      I do if it means higher prices, poor customer service. I’ve been through a merger with At&t, when Cingular bought out the old At&t Wireless. Cingular (now the At&t that we know) forced, for a better word, the customers to switch to their network by virtually crippling the existing service. The HELL with At&t. Verizon will be my provider if I have to pay high rates. Also, they offer 5 GB plans for data compared to At&t’s 2 or 4 GB plans.

  • Mighty_O

    Oh…noooo the end of the world as we know for tmobile :0

  • inviolable

    lol I can’t believe what i’m reading. Selling customers? What is this, a modern day slave trade? How could they even be allowed to do this? Just kill the deal already. Spend your 39 billion damn dollars to improve your network.

  • snowbdr89

    Selling off customers? Thats not only pathetic but kinda shows how desperate att really is!!

  • superboriqua

    Leap is not gonna pay for customers that are not on contract, ATT is gonna sell contracted customers, noone is gonna buy customers that can leave at the end of the month. Besides if the deal does go thru I’m pretty sure sprint Verizon and att will but out advertisements telling tmo to switch over they will pay the etf and give you a discount on a new phone

  • RAWLogic

    Does anyone know which customers are supposed to be “sold”? Someone above mentioned that it might be prepaid customers only. I can’t imagine that AT&T would be evil enough to sell normal high paying customers to a company like Leap…

    Also on Leap’s side, I would imagine that this would be a great deal for them. Is there any downside for Leap?

  • Taylor

    Heinous move. Forcing customers onto an incompatible network will only leave them three foul options: (1) buy a new phone at full price. (2) buy an new phone at promo price and start a new deal with an unproven carrier, or (3) jump-ship due to an invalidation of their contracts and take their marginally compatible handset to AT&T. I know which option they would like to see…

    One hopes the DOJ sees through this sham.

  • Droid Dewd

    Ugh. Will this merger biz please just slug off to some dark corner and die already. I like Tmobile enough right now, but I will definitely hop to Verizon if I get bumped to Leap/Cricket. Maybe we need to #occupyTmobile stores till the merger is dead. Hmmm….

    • http://www.facebook.com/profile.php?id=100000631046637 Jimmy Bones

      Occupy T-Mobile stores….. FOOD FOR THOUGHT

  • spintrex

    Good news for Leap? ….. What a low blow to T-Mobile customers though who have probably been around for quite some time and to be handed over like a fattened pig.

    What a great way for ATT to manipulate Tmobile customers to sign up with them. “You have two options, you COULD sign up with Leap, but i dont know why you would, or sign up with us, we have cake and smell great ;)” Do cellular companies across the pond do such devious acts?

  • http://www.facebook.com/profile.php?id=100000631046637 Jimmy Bones

    The whole idea of the merger pissed me off really. I think the people like myself who love having T-Mobile should have at least got a say in the deal. A poll of some sort to what the customers think. AT&T is being a selfish punk. Think of all the households who love the expenses of T-Mobile and there services. This whole merger could have been prevented if T-Mobile USA paid more money to get more spectrum’s so that rural areas would not roam. If T-Mobile customers had HSPA+ everywhere, then the need for a merger would not have happened. AT&T does not think the difference between the two bills will be a problem. From my opinion, it truthfully does. From both ends, the merger is a dumb idea. AT&T proved to America that not only are they slacking in the LTE HSPA era, they would never reach it to be a threat to Verizon and Sprint. I believe if this merger goes through, the majority of T-Mobile customers will fly straight to Verizon. MY LAST THOUGHTS: WHO IN THEIR RIGHT MIND WOULD WANT A DIFFERENT PHONE COMPANY AND ONE IN PARTICULAR WANTS TO LIMIT YOUR DATA PLAN. T-MOBILE HAD UNLIMITED EVERYTHING. FROM MORNINGS TO NIGHTS TO WEEKENDS. AT&T SHOULD JUST GIVE UP BECAUSE THERE ARE SO MANY CONFLICTS WITH THEIR INTEREST THAT IT WOULD DELAY THEM FROM THEIR DIRECT COURSE TO SUCCESS. T-MOBILE USA WILL PROSPER ON ITS ON.

    • http://www.facebook.com/profile.php?id=100000631046637 Jimmy Bones

      OWN

  • Nathan

    Who want to take bets??? Well anyone I’m choosing it not going through

  • oddball

    The more I see about this merger the more I hope Amazon gets into the game and prevents tmobile from going extinct. It seems like a great opportunity for any “new” player to hop in and show what can be done with a good supporting infrastructure. But I don’t see any company other than Amazon that would be interested or could do it without massively upsetting business partners (google). Amazon could also use tmobile’s network to turn the kindle line into an even bigger powerhouse giving the current line along with the rumored 10″ tablet and phone could be tmobiles network and all amazon data services outside of data caps might attract customers and might secure a future for tmobile that isn’t looking good given how badly DT want to get rid of it

  • Joshua

    Guess it all depends on where you live and how much you travel. Cricket wireless is HUGE here in TX and I haven’t heard a single negative thing about them and I have several coworkers who use them. You go somewhere else and they don’t even know what Cricket wireless is. I jumped ship to AT&T from TMobile after I heard the merger was going through and just figured I would make the move under my own accord. I am regretting EVERY second of it. It’s more expensive and they aren’t even including text messaging in my plan that is MORE expensive than Tmobile with less being offered. AT&T is just moronic when it comes to their business model…

  • charliethesuperturtle

    Actually metro will be the 4th largest cellular company in the u.s.
    Everyone is going to ditch leap so I don’t think leap is going to get anymore sales.
    My theroy but alas instill hope this doesn’t happen

  • snowbdr89

    No but your sister does