Dec 19 AT 9:18 AM Anthony Domanico 77 Comments

AT&T-Mobile deal all but over, joint venture partnership likely

merging-cloud-arrows

It’s becoming more and more clear that AT&T will not be allowed to buy T-Mobile USA outright. AT&T’s fourth quarter Hail Mary effort to save the deal involved selling off some of its assets to appease government opposition, including a potential selloff of customers and spectrum to Leap Wireless. The Wall Street Journal is reporting that these divestiture negotiations cooled off over the weekend, and AT&T is now preparing itself to pay the $4B breakup fee to Deutsche Telekom.

Though it appears a full takeover of T-Mobile USA is off the table, two likely alternatives are emerging. First, and perhaps the most likely scenario, AT&T and Deutsche Telekom are discussing entering into a joint venture in the United States that would combine AT&T and T-Mobile’s resources together to create a combined network. The result would be something similar to carrier Everything Everywhere in the UK, which is a joint venture between T-Mobile UK and Orange where Everything Everywhere acts as a single company that runs both T-Mobile UK and Orange networks in the UK.

Alternatively, Dish Network has long expressed interest in entering into the mobile market. Just last week, Dish Network expressed interest in purchasing T-Mobile USA if the AT&T purchase falls through. Dish Network has been acquiring spectrum left and right lately, but still doesn’t have enough spectrum to launch a widespread cellular network. Purchasing T-Mobile would provide Dish Network with the opportunity to launch their own carrier, probably under the Dish moniker.

Regardless of which suitor ultimately partners with or fully acquires T-Mobile USA, Deutsche Telekom (DT) continues to indicate that they have no interest in staying in the US market for long. It is widely believed that the $4B breakup fee from AT&T will be used to invest in DT’s European network, not to bolster the operations of ┬áT-Mobile USA.

We’ll likely know more about T-Mobile USA’s fate in coming months. For now, it appears T-Mobile customers can rest assured that they won’t become AT&T customers anytime soon (or Leap Wireless customers, for that matter).

Via: The Verge

Source: Wall Street Journal

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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  • Deeds

    Hopefully the deal falls through, I can’t stand AT&T

    • ArticulateFool

      A joint venture definitely sounds like the lesser of two evils.

      I really hope there is a cost competitive carrier in the USA after this all settles.

      • Andy_jr

        “I really hope there is a cost competitive carrier in the USA after this all settles.”

        That is the crux of it for me. The more competitors, the better. If the joint venture accomplishes this, then that’s fine. If Dish Network would be a viable competitor, then that’s fine too.

    • lxgeorge

      SECONDED

  • BiGMERF

    That joint venture idea is not a bad idea if the prices we pay now remain the same and we can still utilize the coverage provided by both comapnies

    • twugd

      I am not in favor of the joint venture. It will mean that they work under one umbrella name which is same as if they would have merged.
      This means less competition in the GSM space in the US, which means higher prices, poorer customer service, less innovation.

      • BiGMERF

        Thus why i said “if the prices we pay now remain the same”

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

          Remember, AT&T promised higher prices for both companies regardless of outcome. haha

          • BiGMERF

            Thats why i locked n my tmo contract last month to secure the price for atleast the next 2 years.. lol

          • twugd

            Yes, but what incentive do they have to keep prices low when 1 company is the only major player in GSM space. If they do maintain prices however, and utilize the coverage of each other’s networks to maximize the benefit for customers, then I am all for it. But will they?

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

            yeah, only if AT&T honors it. ha

          • Futureboy

            This is precisely why I think the merger is still bad for consumers. Wouldn’t this still essentially create a GSM monopoly? Plus, who would be running the combined corporation? Who will set the policies? Make the deals for the best new phones? AT&T has traditionally given Android weak support at best and an AT&T-Mobile merger would most likely be bad for Android users on TMob. This is why I wouldn’t mind Dish taking a stab at it. One thing is for sure, they are big on undercutting the competitors on price.

          • Futureboy

            Correction: “merger” is still bad= joint venture is still bad.

            (Androidandme…. I’ll give you a crisp new dollar if you make an edit button and give us a 5 minute window to make corrections)

          • thechad

            They will need to increase rates to pay off the 4 billion

        • LukeT32

          At&t is a joke.

        • ArticulateFool

          I locked into my tmo contract for this very reason.

          It secures my pricing through this troubling period.

          • tengo

            I did the same. Now that I think of it, renewed contracts are probably on the rise with everyone trying to avoid a price change in the near future. Just an added bonus on T Mobile’s end of the deal.

  • twugd

    It’s good that they didn’t merge. Less competition is never good for consumers.

    • stenzor

      Not only that, but combining them into one larger entity could mean that they will be more of a threat to their competitors.

      • twugd

        Agreed. Big players can squash out smaller players easily.

        • http://sean-the-electrofreak.blogspot.com/ Sean the Electrofreak

          And this is proven by the fact that Verizon supported the merger (they’re big and not worried because it’s not likely AT&T-Mobile is going to undercut them) but Sprint opposed it (they’re smaller and more likely to get steamrolled.)

      • stenzor

        Looks like I was downvoted by AT&T reps

  • zyphbear

    While I’m personally glad this isn’t going through, I know some people would have liked to have gotten some better signal or an easy opportunity to switch carriers.

    I really just hope this falling through doesn’t bring down T-Mobile and cause their value to plummet. That’s the last thing they need now.

  • spintrex

    I still feel like At&t has something up their sleeve… though not quite sure what

    • Thomas Biard

      Well now that they don’t have iPhone exclusivity they have very little to make them shine above the rest, so I’m definitely going to agree with you…be affraid, be very affraid!

  • lawrenceh

    I’m glad the deal is failing. The joint venture idea is interesting. But i hope the best parts of each company shine through, and not the worse. Either way, i don’t want my bill rising. I will leave.

  • staryoshi

    It’s too bad that DT would be able to take the $4B out of the US. It’s lose-lose for consumers, as its further incentive for AT&T to justify a price hike and not of benefit to t-mobile. The cost of mobile contracts are too high and too long… We need positive movement in the market to stimulate competition.

    • Steve

      Only 3B of that 4B is in cash, 1B is in AWS freq’s which will do DT no good at all in Europe. Guess they could sell it to the highest bidder, but that would require FCC approval also. Dish already owns more spectrum in the AWS 700Mhz band to build out a nation wide LTE network than AT&T and Verizon and T-Mobile would not even need to change out their cell site antenna’s, sweet.

  • Ironzey Lewis

    Lately AT&T seems to be stepping up their game. HSPA+, LTE they also has announced some pretty great hardware: HTC Jetstream running on LTE, that Galaxy note don’t forget we saw a AT&T compatible version of the Galaxy Nexus pass through the FCC recently.

    I’m still a very happy Tmobile customer but it might not be too bad to take advantage of what AT&T has to offer.

  • Joseph Roberts

    I didn’t like it when AT&T bought Cingular and I’m glad they won’t be buying T-Mobile outright. Not sure about DISH being a carrier. How’s their customer service?

    • lawrenceh

      I was caught up in that mess. That is how i found TMO. I really dont want to go back. I’d rather be beat with hammers.

    • GeauxLSU

      Wasn’t Cingular just a joint venture between all of the local Bells? I know here BellSouth Mobility became Cingular. Sounds like the joint venture is just a smoke and mirrors game.

    • Steve

      I have been with Dish for over 13 years and have no complaints with their customer service at all. Most of the time they will bend over backward to get a positive opinion from their customers. I have been with T-mobile since 1999, when their were the ONLY GSM carrier in the US, name was PowerTel and they were the only cell provider that did not charge roaming. I have had great service ever since and it seems to be getting better. With what Dish Network owns in AWS bandwith, along with what T-Mobile will get from AT&T as part of the AT&T failed merger fees, it would be a great company for future LTE deployment.

      • jayson

        Actually in 1996 there was a company out west called VoiceStream that was a GSM carrier. It was purchased by T-Mobile some years later. This was years before AT&T decided to move towards GSM.

    • cxandroid

      Yep, I was with Cingular at that time, almost immediately service started to suck.

    • Colin

      actually it was Cingular that bought AT&T

  • Darknight42020

    Glad I will not become a straight out AT&T customer and will see what becomes of it all. Truth be told I was more worried about a leap acquisition and don’t like the option of Dish becoming involved. Dish would have almost no issue “sticking” it to their customers without the worry of backlash from disgruntled customers. Most of the cell services would just become packaged into their Sat TV plans with little or no regard to those who just have the phone service. I imagine it would become almost unbearable to have a phone plan without giving into a “package” deal…

    • Futureboy

      From a business standpoint, packaging cell with satellite as the only option would mean certain death, so it’s highly unlikely they would go that route. It’s a safe bet that they would offer a package deal for those who want it, but still offer cell service independent of satellite (much like AT&T does with cell and U-Verse). But then again, corporate management hasn’t always made the smartest decisions. For a case study in monumentally bad decisions, you only have to look as far as the recent Netflix debacle where a few bad decisions cost them 70% of their market value in just four months.

  • engineerga

    I used to have AT&T for wireless and still have them for internet/home phone. I feel so, so sorry for anyone who gets dragged into their customer base. I would switch in an instant if there was any viable alternative for me.

    I am proud this merger deal didn’t go through just like the majority of commenters here. I have to wonder why they thought the gov’t would be cool with their knocking off one of the major four providers, though. Actually building in a massive deal breakup fee like $4B? What they heck were they thinking? When I first heard of the potential deal in blogs, I said there was no way the gov’t would allow such a deal that would kill off one of the major choices for consumers. So I can’t imagine how cocky they had to be to think they’d just ram this down the gov’t’s throat and get it done. If T-Mo was going bankrupt, I could see them “bailing out” T-Mo by negotiating a merger with AT&T like they did with Chrysler and Fiat. But not letting a big company swallow up a smaller (but still huge) competitor that is still perfectly alive and kicking.

  • the5thdimension

    I’m currently on T-Mobile just waiting to hear any Galaxy Nexus news and of course what will be T-Mobile’s fate. I’ve been with T-Mobile for 8 years and they haven’t given me any reason to leave. DT keeps letting it be known they want out of the US, so something has to happen and soon. I’m hoping whatever happens will not affect T-Mobile and their customers in a negative way. I’m wondering if I should just activate my SGS2 on Sprint already. I got my life raft ready in case I need to jump ship.

  • redraider133

    I wonder how that would affect current prices for tmo customers? Maybe with the 4B that Tmo is getting they will be able to put that back into expanding their network and help gain more customers? They always had a pretty good phone lineup it was just their coverage was lacking in many areas.

  • mclarensr

    Honest question.

    What if T-Mobile decides to shut down? Can they do that? What would happen then? So much for talking about competition.

    • twugd

      They won’t shut down and leave. It’s too costly an affair. Read 100 billion dollars and above. All the infrastructure costs a lot. Some one will buy them out and they will run T-Mo operations after the buy out.

      • Futureboy

        I would love to see them split off and become their own independent entity. There is a lot involved in going that route as well, but it can be done, and it has been done successfully in the past. I know it’s unlikely, but one can hope.

  • Dee

    idk if i could be taken seriously with my carrier being dish network…they may mean well and such but i just see dish failing horribly trying to be a cable provider and a cellular provider. the two are not the same. i know its become a wishful thinking ting but i wish google would buy t-mo. maybe its a consideration since a carrier is trying to sue them now…

  • nsnsmj

    I wish Sprint and T-mobile could merge. Anyway, I’m glad it looks like the acquisition won’t go through, but a joint venture still isn’t all that great.

    • ndub21

      The problem with that is that they have 2 completely different technologies (CDMA vs GSM). Not sure that would work.

      • nsnsmj

        Oh I know. That’s part of the reason I said ‘I wish’ they would merge instead of ‘they should’ merge.

  • ramenchef

    I don’t mind a joint venture as long as they don’t pull anything shady.

    • cxandroid

      But of course, They will use a monopoly-ish position to their advantage…

  • ndub21

    Stupid AT&T. Don’t raise my prices one cent or I’m jumping ship.

  • Galen20K

    I’m relived. I could deal with a partnership instead of a full take-over or sell off of T-Mobile. Sharing combined resources sounds good as long as A) Prices on T-Mobile stay the same and B) Increased coverage help both companies and C) the benefits of Unlocked phones working on both companies, I would love that. Plus T-Mobile would finally have an LTE network.

  • eliander mendoza

    Say no to AT&T i really don’t like it…. bad customer service….

  • Nathan D.

    well hopefully thing will have a better out come for costumer

  • MrMrMan

    In spite of all this crap. T-Mobile is still earning a profit. How about that…

  • McLovin

    When has less competition ever been good for the consumer?

  • Biafra Republic

    I doubt even a joint venture will fly as far as the FCC is concerned, since we already have one called Verizon Wireless (a.k.a. Cellco Partnership = Verizon + Vodaphone).

    • redraider133

      But vodaphone is not in the US. TMO and at&t are both US cell operators, and by having a joint venture, it could still cut down on competition and less choices for the consumers.

  • http://www.jimtravis.com jimtravis

    T-Mobile historically has lower rates, and any partnership, joint venture, etc that negatively impacts consumer plan costs would be bad.

  • http://youtube.com/user/jawckamoe Marcus

    Its a good thing they didn’t buy T-Mobile. I honestly don’t want the joint venture to go through. I’m a little worried about the prices and what else will happen if that goes through.

  • cxandroid

    Still won’t be good for consumers.
    Period.

  • Danerisms

    Ohh That is great to hear! I could see beneifts from the partnership. 4 Billion in profit for T-Mobile could go a long way in securing a better approach.

    For now, I will count this as a Christmas Gift to all of us!

  • Brook Marin

    this joint venture thing scares me… you mean they are going to put all of ATT and Tmo’s customers on ONE network!?

    Think this through… Tmobile’s HSPA+ is on 1700 and 2100MHz while ATT’s HSPA(not +) is on 850 and 1900MHz (LTE is on 700 MHz). So with a joint venture which band(s) are going to be used? 850 and 1900 are used for EDGE, GPRS, and GSM for both companies. So those bands are crowded already. That leaves us with Tmo’s HSPA+ bands and ATT’s LTE band.

    So, that pretty much means ATT will dump as many customers as they can on Tmo’s bands and screw their connectivity in the mean time… all until the joint venture can build out an LTE network that will be even more crowded!

  • Marc’us H.

    As far as plans, I keep hearing that Europe is years beyond what they offer in the US (I don’t really know, I’ve never been out of the country), so MAYBE a joint venture can be good … but they’re going to have to put a lot out there for consumers to understand what this means for them in the long run.

  • Adryan maldonado

    Wow. I hope they atleast keep up good customer support for Tmobile customers. The really want to get out of here which could lead to alot of problems( i do technical support for alltel customers and it is not pretty after they had to completely rebuild their system since the FCC did not let verizon buy alltel). I dont the concept of a cable trying to be a cellular provider though it would be interesting. Either tmobile seems to no longer want to be Tmobile

  • Martjn2

    All this carrier bullcrap in us, i feel sorry for u guys

  • zerosix

    And I just pray, that Motorola and Google will be ok.

  • Gnuelnab

    I hope to see more of that t-mobile girl

  • UMA Fan

    Android and Me’s articles regarding the merger are always a little factually skewed. They mention completely false things like T-Mobile USA being close to bankruptcy sometimes. Do these guys have zero sense of reading comprehension?

    Also, while no one can know for sure what can happen I believe Dish Network only stated that they would be interested in a partnership with T-Mobile USA. I’m not 100% but I also believe that T-Mobile USA is a bigger company than Dish Network, or at least valued more.

  • Danny Calderon

    Even though I don’t like ATT, it is 100% better than leap wireless, just hope something gets resolved soon

  • http://ilysespieces.tumblr.com Ilyse Rose

    I wish TMo could go back to the awesome way they were before the merger started. Their customer service has gone down the drain ever since it was announced and now it’s just disappointing.

  • Chuxter

    Am I the only one upset that the billions from AT&T would be used to improve the European network?

  • honourbound68

    i’ve had sprint for the past 12 years. love the pricing but the network sucks in my area…i know that gsm isn’t as good as cdma in bldgs but can tmob users in NJ/NY area pls respond on how tmob’s coverage is? thanks.

  • ramenchef

    I can see good things coming out of a partnership. Hopefully it helps drive prices down.

  • donger

    YES

  • CJ

    So to prevent a U.S. company from becoming too large and having a stronger network we’ve forced it to take $4 Billion and export it out of the country’s economy? Awesome, I guess? :-/

  • humidity

    +1 for T-Mobile! Woot!