Attempted purchase of T-Mobile USA by AT&T

On March 20, 2011, AT&T announced that it would purchase T-Mobile USA. On August 31, 2011, the Antitrust Division of the United States Department of Justice formally announced that it would seek to block the takeover, and filed a lawsuit to such effect in federal court. The bid was abandoned by AT&T on December 19, 2011.

AT&T announced its intention to buy T-Mobile USA for $39 billion from Deutsche Telekom. The deal would come with 33.7 million subscribers, making AT&T the largest mobile phone company in the United States. If the deal were to go through, AT&T would have a 43% market share of mobile phones in the U.S., making AT&T significantly larger than any of its competitors.

On March 20, 2011 Deutsche Telekom AG accepted a US$39 billion stock and cash purchase offer from AT&T Inc. for T-Mobile USA, Inc.

According to an industry analyst, after the introduction of the iPhone in 2007, T-Mobile USA began to lose lucrative contract customers, dropping to 78.3 percent of subscribers in 2010, compared to 85% in 2006. T-Mobile USA's high churn rate of 3.2% compared to 1.2% at Verizon Wireless and AT&T Mobility, the needed investments in network upgrades and spectrum purchases were too risky given the drop in contract customers, reinforcing Deutsche Telekom's decision to sell.

This purchase was required to undergo a regulatory review that the two companies expected to take at least 12 months. The deal required approval by the U.S. Department of Justice and the Federal Communications Commission. The FCC handled the review under WT Docket No. 11-65.

The Wall Street Journal reported on 11/25/11 that AT&T had taken a $4 Billion write-off ($3B cash, $1B in value of spectrum) in Q3 of 2011 in anticipation of the deal falling through.

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