Although AT&T announced last week that it was withdrawing the merger application, The New York Times reports today that the wireless giant has been involved in some quiet, last-minute maneuvering to appease the Justice Department. The details of the plan would see AT&T selling off T-Mobile customer accounts as well as part of its wireless spectrum to a small wireless company, Leap Wireless.
The Times' Andrew Ross Sorkin explains:
AT&T hopes such a deal would placate the Justice Department enough for it to drop its opposition to AT&T’s acquisition of T-Mobile, these people said, or at least to strengthen AT&T’s hand if it goes to trial. The deal would make Leap the fourth-largest wireless carrier in the nation, but it would allow AT&T to retain enough of T-Mobile’s valuable wireless spectrum, which it says it badly needs to provide the kind of next-generation service that its customers expect, these people said.
Even if AT&T's concessions should be enough to satisfy the Justice Department, the impact of the merger is still undetermined. At this point, AT&T's gains are questionable and should the merger ultimately fail it stands to lose $6-$7 million. With that failure looming as a real possibility, the question remains: what does AT&T really stand to gain from this deal? Even if the T-Mobile acquisition is justifiable under the terms of eliminating a major competitor, does it stand up to reason if the product of the merger elevates a small carrier like Leap into a legitimate player among wireless providers?
Perhaps more importantly, what impact will the merger (or lack thereof) have on customers currently contracted to the three involved wireless carriers? What do you think? Let us know.