According to various reports, AT&T (NYSE:T, news, filings) is considering the possibility of divesting up to 40% of T-Mobile USA in an effort to salvage its intended acquisition following the FCC’s decision to pile on. It would be an expected yet bold revision to the original deal, but honestly I rather doubt it’s going to work.
Rumors of possible talks with a wide selection of the company’s wireless competitors have cropped up throughout the fall season, and of course some sort of divestments were always certain to be part of any approval anyway. But 40% would be a big chunk, and AT&T apparently hopes this may assuage regulators fears that competition will be damaged. What they really want, they say, is the spectrum with which to compete in years to come.
But the FCC and DOJ haven’t zeroed in on particular markets where the merger may upset the competitive balance. Rather, it’s the entire concept of T-Mo being gone and AT&T being substantially bigger that is what is worrying them. Add in the fact that this is an election year, which will harden positions across the board, and the path ahead for AT&T’s purchase of T-Mobile USA is decidedly uphill even with such offers to divest vast swaths of the company.
Yet one should never underestimate the power of AT&T’s lobbying and legal teams, and if they can drum up enough interest from the likes of MetroPCS, America Movil, Leap, and yes even Sprint… Yes, it could happen. But I have to ask, might these potential buyers find it more attractive to wait for the deal to collapse and then pick up the pieces later when DT explores such alternatives of its own?
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