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AT&T May Have To Divest Assets in T-Mobile Deal

AT&T CEO, Randall Stephenson has confirmed that they may be forced to divest customers, along with wireless spectrum in their bid for T-Mobile USA. This announcement does not come as a surprise to many. Mergers involving two major wireless companies would require some sort of divestiture involved. This has not been the first time a wireless company has been asked to do this. In 2008, Verizon Communications agreed to buy Alltel for $28 billion, in that deal that took over a year to complete, Verizon, in the end had to agree to some stipulations. Ironically, AT&T was the highest bidder on some of Verizon’s divested Alltel assets.

T-Mobile and AT&T are the two largest GSM carriers in the United States, which poses a particular challenge when it comes to divested assets. Due to both companies being GSM any divested assets will most likely be GSM technology, which will be attractive to small regional carriers. Sprint may also be interested in acquiring these assets and could benefit from the purchase of the cell towers which can be equipped with Sprint 3G or WiMAX antennas. Also, AT&T does have a nice chunk of 700 MHz spectrum that both them and Verizon Wireless plan to use for LTE, and if put up for sell in this agreement to buy T-Mobile, Verizon would more than likely  jump at the opportunity to purchase it.

As we have seen in the past with mergers like this one, it will be a long road before a final decision is made. We already know that Sprint plans to fight this merger between the two GSM carriers hard and the FCC has also mentioned that it will be a steep climb to get this deal approved. It will be over a year more than likely before we see a final decision regarding the AT&T/T-Mobile merger, but we will keep you posted on any developments that happen.


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