AT&T is planning on buying T-Mobile USA from Deutsche Telekom for $39 billion in cash and stock. The deal must be approved by both the Department of Justice and the Federal Communications Commission first.
“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said AT&T Chairman and CEO Randall Stephenson. “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,” added Stephenson. “During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.”
T-Mobile says customers will experience no change in their service. Their devices will continue to work, and they will continue to be billed by T-Mobile, rather than AT&T. Contracts will be honored.
An agreement was announced under which AT&T will acquire T-Mobile USA. The agreement is the first step in a process that, including regulatory approvals, is expected to be completed in approximately 12 months. Until then, we remain a separate company and continue to operate independently.
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“Bringing together these two world-class businesses will create significant benefits for customers,” the company says. “The merger will ensure the deployment of a robust 4G LTE network to 95% of the U.S. population, something neither company would achieve on its own. Also, because of our compatible networks and spectrum, the customers of T-Mobile USA and AT&T will experience improved voice and data service almost immediately after the networks are integrated.”
The acquisition plans, as one might expect, are drawing a massive amount of criticism, mainly over the reduction in choices for consumers. Some have specualted that Verizion will try to acquire Sprint next.
One might expect T-Mobile users to at least get access to iPhones and iPads. On a FAQ page, T-Mobile’s response o the question, “Is T-Mobile USA getting the iPhone?” the company says, “T-Mobile USA remains an independent company. The acquisition is expected to be completed in approximately 12 months. We do not offer the iPhone. We offer cutting edge devices like the Samsung Galaxy S 4G and coming soon our new Sidekick 4.”
Under the deal, Deutsche Telekom would receive $ 39 billion USD, and would have up to an 8 percent stake in AT&T (25 billion in cash and $14 billion in AT&T shares). Deutsche Telekom says it plans to use about 5 billion EUR for share buybacks.