AT&T T-Mobile deal settlement could lead to spectrum fire sale deal settlement could lead to spectrum fire sale


The AT&T T-Mobile US acquisition can still be
completed, as long as AT&T divests appropriate spectrum and persuades
Deutsche Telekom to be patient, according to Strategy Analytics.


The Strategy Analytics
Wireless Operator Strategies (WOS) service analyzed AT&T actions which
could satisfy the Department of Justice (DoJ) in order to get approval for the
T-Mobile acquisition.


The recent DoJ intervention to block the acquisition
represents a return to pre-2000 antitrust enforcement,” said Sue Rudd,
director, Service Provider Analysis at Strategy Analytics.


The DoJ review of the AT&T T-Mobile acquisition may
be compared to the 2000 GTE Verizon deal which took 23 months to complete and
required many DoJ-requested modifications. AT&T still has strong national
competition. The potential problems are in specific Cellular Market Areas
(CMAs),” Rudd added.


This DoJ intervention makes it nearly impossible for
AT&T to meet the March 2012 deadline with Deutsche Telekom,” said Phil
Kendall, director, Strategy Analytics Wireless Operator Strategies (WOS).


Deutsche Telekom will need to be persuaded to waive its
penalty clause or at least to extend the date. This is probably still the best
deal they can get for T-Mobile US,” Kendall added.


The DoJ highlighted major markets where AT&T will
likely have to sacrifice spectrum, including Dallas, Houston, Oklahoma City,
Birmingham, Honolulu, Seattle and some smaller CMAs. Smaller operators Sprint,
MetroPCS, Leap Wireless, US Cellular and even Dish Network could pick up a good
bit of this AT&T spectrum at fire sale prices.


Recently, the U.S. Justice Department has sued to block
AT&T’s proposed $39 billion takeover of T-Mobile USA and the development
will have a telling impact on the investment plans of AT&T.


This will be a big blow to AT&T’s initiative to build
the largest U.S. cellphone carrier. The uncertainty is likely to block
AT&T’s network investments. Recently, AT&T has committed as part of the
T-Mobile merger to increase its U.S. infrastructure investment by more than $8


By Team
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