MetroPCS first in line for AT&T's disposal of assets post T-Mobile merger
With AT&T's attempt to purchase T-Mobile, it seems that you can't tell the players without a scorecard. Of course, the Department of Justice is suing to try to block the deal. Last month, Cellular South sued to block the deal, and surprisingly Verizon's CEO Lowell McAdams said the deal was naturally going to take place because of T-Mobile's lack of capital to build out its network, while AT&T needed more spectrum. What isn't a surprise is that T-Mobile's vice president Tom Sugrue thinks that the deal will go through.
The most vocal objector of the merger has been Sprint CEO Dan Hesse. The nation's third largest carrier is suing to block the deal (join the club!) although at least one analyst says that the carrier will benefit if the deal goes through. But just in case the Feds don't feel the same way, AT&T has already hired Bank of America and Merill Lynch to help it carry out a possible divestiture, as we reported. The Bloomberg report says that the assets to be sold will cost $4 billion which might not be a problem for MetroPCS which is sitting on cash and equivalents of $2 billion. Earlier last month, AT&T said it would consider selling up to 25% of T-Mobile in order to get the deal done.
source: Bloomberg via Engadget
1. Droid_X_Doug (Posts: 5975; Member since: 22 Dec 2010)
Meh. AT&T is scrambling to salvage the merger. Notice how they volunteered to divest 25% of T-Mo? If the merger was not at risk, they would not have offered up 25%. They may have to offer up closer to 40% of T-Mo on fire sale terms to even have a chance.
2. Forsaken77 (Posts: 552; Member since: 09 Jun 2011)
I think it's better for AT&T to sell to smaller companies rather than Verizon or Sprint. Selling to the little guys helps keep them relevant and gives them more of what they need to expand. All the mobile assets are already owned so the only way for the little companies to get anything is through a deal like this.
4. Scuba_Steve (Posts: 79; Member since: 16 Oct 2011)
It actually feels right, I've said the same thing in other articles. When Verizon bought out Alltel, AT&T received 1.5 million of Alltel's customers. I'm curious to why Verizon isn't getting a share out of this.
7. roscuthiii (Posts: 1883; Member since: 18 Jul 2010)
Verizon wouldn't be getting a slice of the pie most likely in my mind due to the GSM/CDMA disparity.
Also, I don't think Verizon even minds not getting helpings. They're probably salivating over the idea of competition being whittled away down to just the duopoly of AT&T and Verizon. Then they can rake in even more profits.
And... right now Sprint uses WiMax for their 4G, but they're switching over to LTE. Let Sprint spend their money first and then because (if) AT&T gets to acquire T-Mobile for spectrum, Verizon should be able to do the same. It kinda sets a precedent.
8. DROIDFANX (Posts: 11; Member since: 26 Jul 2010)
Incorrect. When AT&T bought Centennial Wireless, they had to give up divested markets which VZW picked up. They were a GSM based company.
5. vvelez5 (Posts: 623; Member since: 29 Jan 2011)
This is exactly what was supposed to happen. Just like when Verizon bought Alltel they had to divest some assets. Nothing is desperate about this, this is exactly what is expected when AT&T elected to buy T-mobile.
6. ChrisTheTechGuy (Posts: 85; Member since: 04 Nov 2010)
ATT and Bank of America working together, the consumers shall pay the price