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AT&T drops $39 bln bid for T-Mobile

12-20-2011 10:13 BJT

BEIJING, Dec. 20 (Xinhuanet) -- AT&T has dropped its 39 billion dollar bid to buy T-Mobile USA in the face of opposition from U.S. Justice Department and Federal Communications Commission.

AT&T, U.S. second-largest wireless carrier behind Verizon Wireless, will have to pay T-Mobile’s parent company Deutsche Telekom 4 billion U.S. dollars, which includes 3 billion dollars in cash as a breakup fee and 1 billion dollar worth of airwaves, known as spectrum that AT&T doesn't need for the continued rollout of its high-speed “4G” network.

It will also enter into a roaming agreement with Deutsche Telekom so that AT&T's and T-Mobile's customers can use each other's networks.

In pulling out, AT&T said the government's attempts to block the deal do not change the challenges of the wireless phone industry, which has been clamoring for more airwaves to expand.

AT&T will “continue to invest” in its own services, Randall Stephenson, AT&T chairman and CEO, said in a statement.

It will look elsewhere for the wireless airwaves to support the high demand for mobile data services and to compete with larger rival Verizon Wireless

Some analysts believe that failure of the bid could be a bigger problem for T-Mobile than for AT&T, because Deutsche Telekom has been eager to sell T-Mobile and isn't keen on investing more in the company, which has seen revenue decline slowly with the flight of higher-profit contract customers.

AT&T announced in March the purchase of T-Mobile from Deutsche Telekom of Germany. The U.S. Justice Department sued to block the merger on Aug. 31. And the Federal Communications Commission's (FCC) chairman also came out against it in November. The companies withdrew their FCC application last month.

Editor:Zhang Hao |Source: Xinhua

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