AT&T issued a statement this afternoon announcing that AT&T and Deutsche Telekom have agreed to drop the merger bid, which had come under heavy scrutiny from the U.S. Government. AT&T and T-Mobile USA will agree to a roaming deal which will allow their phones to work on each other’s networks. In an official statement, AT&T stated:
The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.AT&T
AT&T will pay Deutsche Telekom the $4 Billion break-up fee that it had set aside earlier this quarter. We still don’t have any idea whether or not AT&T and Deutsche Telekom are pursuing a joint venture, though we expect that to be the most likely scenario at this time. We’ll keep you updated as we learn more.