Mobile

AT&T Tries to Retool Fading T-Mobile Bid by Boosting Leap

Published on November 29, 2011
by John Paczkowski

With the FCC apparently ready to let AT&T withdraw its application for approval of its T-Mobile acquisition while it does battle with the Justice Department, the company is hard at work on an eleventh-hour revamp to try to salvage the deal.

The plan, according to the New York Times: Sell off some of T-Mobile’s assets (customers and spectrum) to Leap Wireless International.

Such a move would make Leap Wireless the fourth-largest carrier in the nation, while allowing AT&T to keep only those T-Mobile assets it really needs. But will it win AT&T the regulatory approval it needs to proceed? Seems unlikely. Transforming Leap into the nation’s No. 4 carrier doesn’t do much to preserve competition in a market in which AT&T and Verizon hold a clear duopoly.

But at this point, AT&T is evidently willing to try anything, even risking a $39 billion merger on a deal with a company that does around $700 million in revenue per quarter. And given the circumstances, who wouldn’t be making last-ditch efforts? If the deal fails to garner regulatory approval, AT&T will owe T-Mobile parent Deutsche Telekom $3 billion in cash and $1 billion worth of spectrum.

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URL: http://allthingsd.com/20111129/att-tries-to-retool-fading-t-mobile-bid-by-boosting-leap/