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Telecommunications industry

FCC Chairman Opposes AT&T's $39 Billion Acquisition of T-Mobile USA

Strategic Insights

— 2 min read

FCC Chairman Julius Genachowski has expressed opposition to the proposed $39 billion acquisition of T-Mobile USA by AT&T, citing concerns that the deal would lead to massive job losses and reduce wireless competition in nearly 100 of the 100 largest US markets. The deal, which was initially expected to close in 12 months, would see AT&T and Verizon controlling nearly 80% of the wireless subscribers nationwide. AT&T has claimed that the acquisition would create new jobs and increase infrastructure investment in the US, but the FCC has disputed this claim.

Key Takeaways:

  • The FCC's draft order seeks additional review of the deal by referring it to an administrative law judge and requiring AT&T to prove that the deal is in the public interest.
  • The proposed deal would add 34 million customers to AT&T and give Deutsche Telekom an 8% ownership interest in the company.
  • AT&T has claimed that the acquisition would create 55,000 to 96,000 new jobs and bring back 5,000 wireless call center jobs to the US from other countries.
  • The FCC has disputed AT&T's claims, citing a recent study that found the merger would lead to massive job losses and investment rather than creation.
  • AT&T believes that the combination will benefit 46.5 million Americans who will have access to its latest 4G LTE technology.
  • The acquisition is expected to increase AT&T's infrastructure investment in the US by more than $8 billion over seven years.
  • The DoJ's antitrust division has filed a civil antitrust lawsuit alleging that the proposed deal would substantially lessen competition for mobile wireless telecommunications services across the US.

Statistics:

  • 34 million: The number of customers that AT&T would gain from the acquisition.
  • 8%: The ownership interest that Deutsche Telekom would gain in AT&T with the acquisition.
  • $39 billion: The total value of the proposed acquisition.
  • 12 months: The initial expected closing time for the acquisition.
  • 55,000 to 96,000: The number of new jobs that the acquisition would create, according to a recent study.
  • 5,000: The number of wireless call center jobs that AT&T would bring back to the US from other countries.
  • 46.5 million: The number of Americans who would benefit from AT&T's latest 4G LTE technology with the acquisition.
  • $8 billion: The amount that AT&T's infrastructure investment in the US would increase with the acquisition over seven years.
  • 80%: The percentage of wireless subscribers nationwide that AT&T and Verizon would control with the acquisition.
  • 100: The number of largest US markets in which wireless competition would be reduced with the acquisition.

Sources:

  • RTT News
  • Deutsche Telekom AG (DTEGY.PK)
  • AT&T, Inc. (T)
  • Federal Communications Commission
  • Communications Workers of America (CWA)

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