Andre Yoskowitz
12 Aug 2011 23:11
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.