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AT&T would pay $6 billion to T-Mobile if merger fails

updated 03:00 pm EDT, Thu May 12, 2011

ATT paying 6b break-up fee if T-Mobile deal halted

Two contacts said Thursday that AT&T's buyout of T-Mobile could be expensive even if blocked by the US government. Terms in the deal reportedly require AT&T pay T-Mobile a $6 billion breakup fee if it can't be completed. Reuters understood that, while $3 billion in cash was already public, there would still be a deal for $2 billion in spectrum and a $1 billion roaming deal.

None of the terms were confirmed by AT&T or T-Mobile.

T-Mobile has singled out wireless spectrum as one of the reasons for agreeing to being bought out and, during Wednesday's Senate hearing, claimed it couldn't implement LTE-based 4G at all because it didn't have frequency in a low enough frequency to give good performance. A spectrum clause in the breakup fee would be a hedge against this, since T-Mobile would likely get access to frequencies it could use for LTE even if forced to fend for itself.

AT&T itself has cast the deal primarily as a hunt for spectrum and tried to convince senators at the hearing that its usable airwaves were hitting their limits. Critics at the presentation, including Sprint CEO Dan Hesse and Cellular South CEO Victor Meena noted that AT&T had large amounts of unused spectrum. Advocacy group Public Knowledge called AT&T a "serial acquirer" that buys carriers instead of focusing more on improving its existing network.

by MacNN Staff



  1. danangdoc

    Joined: Dec 1969


    Dumping AT&T but ....

    This merger, if approved, will be criminal, and a huge loss for the American public. I'm sure congress will approve it, as they are all bought and paid for. Like me, many of my friends with iPhones are going to dump AT&T (and Verizon) when their contracts run out. We will get a good old 'dumb' phone, and save a fortune. For many of us who live in the city or suburbs, we find that we can get our data at a myriad of places via WiFi. My home, gym, favorite eateries, etc. all have Wifi. I think the more people talk about this, and actually do it, AT&T will see a lot lower revenue. Yeah, I though I needed the web no matter where I am. Ain't so. I'm dumping that Albatross!

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