AT&T Agrees to Buy T-Mobile for $39 Billion
DALLAS and BONN, Germany — Telecommunications giant AT&T has agreed to buy T-Mobile USA from Deutsche Telekom for $39 billion.
With the addition of T-Mobile’s 33 million subscribers, the deal would make AT&T the biggest wireless provider in the U.S. with a total of more than 129 million customers.
Verizon Wireless would then become the second biggest player with 102 million subscribers.
The deal gives T-Mobile users access to a planned 4G wireless network using Long Term Evolution (LTE) technology replacing its HSPA+ that delivers 4G-like speeds.
"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future. It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people," said AT&T chairman and CEO Randall Stephenson in a statement announcing the deal.
The terms of the agreement — approved by both boards of directors — call for AT&T to pay $25 billion in cash and the remainder in stock, which gives Deutsche Telekom an eight percent stake in AT&T and a seat on its board of directors.
The deal still needs regulatory approval that reportedly could take up to a year.
But there’s some concern that the merger would shrink customers’ choice for wireless GSM carriers — the main wireless technology in the U.S. and the European standard.
The Federal Communications Commisssion (FCC) has been uneasy about AT&T and Verizon owning 60 percent of the wireless market in terms of subscribers and revenue and the new deal could spark antitrust rumblings.