AT&T, Leap Wireless Negotiate to Save Other $39 Billion Deal for T Mobile USA


Secret negotiations are apparently continuing between AT&T and Leap Wireless to come up with a last-minute solution to save the troubled proposal to let AT&T acquire T Mobile USA for $39 billion.

The New York Times broke a Thanksgiving weekend story that Leap Wireless, which is described as a “second-tier but growing wireless player” may be willing to buy “a big piece of T-Mobile’s customer accounts and some of its wireless spectrum.”

In its analysis of the new deal, The Times speculates that “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 … or at least … 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.”

“If the Leap deal sounds a bit like a Hail Mary pass, that is because it is,” The Times adds, reporting that the $39 billion deal is “on the verge of collapse.”

A new issue in the continuing controversy is whether the Federal Communications Commission will grant an ok to the withdrawal of the $39 billion take-over. Last week, AT&T and Deutsche Telekom AG (T-Mobile USA’s parent company) withdrew the proposed merger. Still, both firms say they will want the merger to go through – apparently at a later date – and claim the law is on their side.

AT&T has threatened to file a lawsuit against the FCC if it blocks the withdrawal of the application, according to a report from TechZone360.

Details on the negotiations between Leap and AT&T are being kept very private. VentureBeat had reported earlier that “AT&T might be willing to divest as much as 40 percent of T-Mobile USA’s asset.”

On the other hand, if the AT&T merger fails, “Leap could purchase T-Mobile’s assets, as it doesn’t look like Deutsche Telekom is interested in continuing its U.S. business. Such a purchase would certainly raise Leap’s national profile, too,” VentureBeat says in its analysis.

AT&T says it withdrew the application to concentrate on the upcoming antitrust suit with the Justice Department, set to begin in February, according to a report from TechZone360. The company says it would reapply with the FCC after winning the suit or coming up with a settlement with the Justice Department, TechZone360 adds.

In addition, the FCC wants the proposed $39 billion deal sent to a federal administrative law judge for review “as it had concluded that the transaction would diminish competition and lead to job cuts,” according to a report from Reuters.

A new force is also impacting the proposed deal. “AT&T clearly missed the shifting mood in Washington,” according to the report from The Times. “While regulators have become more permissive about large transactions, AT&T’s analysis ignored the growing opposition to big business represented by the Occupy Wall Street movement and the tonal change, fairly or not, by President Obama.”

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jamie Epstein

TechZone360 Contributor

Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More