[telecom] Few Winners in Heated Cellphone Wars

Few Winners in Heated Cellphone Wars


If you are wondering who will be your cellphone provider next year, so are the cellphone companies. Maneuvers by American cellphone providers to acquire one another are threatening to erupt into all-out war. And the question is not only which ones will survive, but whether the survivors will be ruined by the prey they are rushing to swallow, leaving consumers by the wayside.

The first move occurred in 2011, when AT&T made a bid to acquire T-Mobile U.S.A., the American subsidiary of Deutsche Telekom, which had been looking to sell it for a long time. AT&T's move was brave, considering the well-known antitrust concerns. As part of the deal, T-Mobile was put in the awkward position of arguing to antitrust regulators that it might not survive if it wasn't acquired because of its smaller size and its annual revenue of only $21 billion.

It was a bad move for AT&T. Regulators blocked the deal, and the company walked away poorer by about $6 billion - the $4 billion it was required to pay over the failed acquisition plus the estimated value of the broadband licenses it was required to grant T-Mobile.


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Monty Solomon
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