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Leaked AT&T letter puts damper on potential T-Mobile acquisition

Written by Andre Yoskowitz (Google+) @ 12 Aug 2011 23:11 User comments (11)

Leaked AT&T letter puts damper on potential T-Mobile acquisition In March, AT&T announced its intention to purchase rival carrier T-Mobile USA for $39 billion, barring any anti-trust setbacks.
Today, a partially-redacted document accidentally posted by a law firm under contract for AT&T leaked online, via the FCC website, and the general consensus is the letter shows that the company is willing to spend over three years of profit just to reduce competition in the market place.

AT&T has been telling regulators that the deal will lead to job gains and network investment, but the new letter, sent to potential investors, shows that is blatantly untrue.

While the carrier has been telling regulators the acquisition will increase network investment by $8 billion, behind the scenes the company is saying the deal will actually help them reduce investment by $10 billion over the next six years.

T-Mobile said last year it planned to spend $3 billion a year in new infrastructure investments.

Additionally, AT&T has been telling regulators that they need T-Mobile in order to increase LTE network coverage, but the letter seems to prove that is also a lie. The letter states that it would cost just $3.8 billion to increase LTE coverage from its current 80 percent to 97 percent (the other 3 percent will likely never get 4G service). Clearly they do not "need" T-Mobile, at a $39 billion premium, when the costs of expanding is just under $4 billion.

There have also been unsubstantiated rumors from T-Mobile managers that there will be thousands of layoffs if the merger were to move forward, which makes perfect sense given the redundancies that will occur.

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11 user comments

112.8.2011 23:13

As a T-Mobile customer for a decade, I hope this letter will help crush the acquisition. We DON'T want higher prices for crappy mobile service and even crappier customer service.

There has not been a clearer case of a monopolistic acquisition in quite some time.


212.8.2011 23:57

This kind of garbage has been going on for years. They call it a hostel take-over. Every company on the planet would love nothing more than to be the monopoly holder & they'll play any "fido fornicates fido" hard ball they can muster to make it happen.

I too hope this busts the merger & possibly makes as a wake-up call to Tmobile to get their act together.


313.8.2011 0:59

This is sick; I wonder how AT&T is going to react. They can't just ignore this and hope it goes away.

413.8.2011 3:44

I concur with DVDBack23 100%. Now, while I, myself, have had T-Mobile for only 6 years now, in that time I have had nothing but exemplary service from them. Verizon & Sprint may provide adequate service, but isn't cdma old tech already? Or am I wrong? And as far as AT&T goes. I'd sooner lick a lighting rod during a thunderstorm than go anywhere near their network.

@LordRuss
I believe you mean hostile takeover. (hoping that doesn't come across as smug)

513.8.2011 4:26

AT&T is the worse liars and thieves I have ever encountered in my life. Their CSRs are worse than telemarkerters with a script. Their willingness to lie is demonstrated by their willingness to lie to the FCC. I hope they placed their lies to the FCC in the mail...then they would be guilty of a federal felony of mail fraud.

613.8.2011 6:32

Ma Bell was broken up for a reason back in the 80s and I find it ridiculous that the government is even considering allowing them to slowly come back together, which is what this AT&T GSM Monopoly will be.

AT&T knows that with a complete GSM monopoly that almost any American who travels overseas will have to use their service and that they and Verizon would be able to charge whatever prices they want for cell service due to lack of competition.

713.8.2011 8:16

LoL...I called this entire article months ago (although I figured it would cost about 1.5x as much for them to build their own LTE network).

Still, this doesn't do anything to stop them; they are only being held up by politicians, and I am sure the bribes are already paid. Now it is just a question of math...the snakes now have to ask themselves if the bribes are enough to buy back the few votes they will lose by approving the buy-out, or for that matter, if they have any chance of being reelected anyway.

813.8.2011 8:25

A big lying company just trying to do what they did in the past and buy up all the competition and stiff the customers with bad service.

913.8.2011 14:50

Originally posted by DDR4life:
@LordRuss
I believe you mean hostile takeover. (hoping that doesn't come across as smug)
Once again I'm showing the value of my 'higher' education... Paying off wonderfully, don't you think?

1016.8.2011 11:05

ATT is turning into a shady organization to the likes of Verizon, who is brutally shady. There's no way the DOJ of the US is gonna let this economic and business injustice happen. NO WAY!

1121.8.2011 2:48

Originally posted by ZeusAV:
Ma Bell was broken up for a reason back in the 80s and I find it ridiculous that the government is even considering allowing them to slowly come back together, which is what this AT&T GSM Monopoly will be.

AT&T knows that with a complete GSM monopoly that almost any American who travels overseas will have to use their service and that they and Verizon would be able to charge whatever prices they want for cell service due to lack of competition.
The reason for breakup had to do with their wanting license for computer based communication. Before the breakup they offered excellent telephony service and that too at a very reasonable price. Their manufacturing arm - Western Electric - was the best in the world. I have their telephones which even after 40 years function flawlessly despite having fallen hundreds of times on to a cement floor. They even needed regulators' permission for any kind increase in tariff.

Last year I came across a T-Mobile shop which offered extremely reasonably priced GSM sims and plans which worked on absolutely any unlocked phone, only kind sold in my country.

Where I come from it costs me only US$ 2.25 per year for all incoming free within my state which includes $ 2.00 worth of talk time. Outgoing cost a mere $0.01 per minute. While roaming outside the state it costs $ 0.01 per minute for both.

I can get 3G service for a mere $ 1.00 for 250 mb transfer!

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