T-Mobile Releases Internal Email Regarding AT&T Deal

I’m still in shock over this so I’m just going to post this and let you, like me take it all in! This is an internal email from current T-Mobile CEO Philip Humm regarding the just announced acquisition of T-Mobile USA by AT&T. Commence crying.

Full Internal Press Release:

Bonn/ Dallas, March 20th 2011

Deutsche Telekom: US Deal accelerates own transformation

? Deutsche Telekom to receive 39 billion USD for US-business ? Deutsche Telekom to have up to 8 percent stake in the leading US

telecommunications company

? AT&T takes over US mobile business from Deutsche Telekom

? Deutsche Telekom will receive 25 billion USD in cash and 14 billion USD in AT&T shares

? Attractive multiple of 7.1 times 2010 adjusted EBITDA ? Deutsche Telekom plans to use approximately 5 billion EUR for share

buybacks

? Deutsche Telekom net debt is planned to be reduced by approximately 13 billion EUR or 31 percent

Deutsche Telekom will take an approximately 8 percent stake in US telecommunication company AT&T. At the same time Deutsche Telekom will hand over 100 percent ownership of T-Mobile USA to AT&T. This has been agreed by the boards of the two companies today. AT&T will pay 25 billion USD in cash for T- Mobile USA, in addition to 14 billion USD in AT&T shares. AT&T has the right to increase the portion of the purchase price paid in cash by up to 4.2 billion USD with a corresponding reduction in the stock component. The value of the transaction will be 39 billion USD. This will amount to an attractive multiple of approximately 7 times 2010 adjusted EBITDA. The merger still needs US regulatory approval. The closing of the transaction is expected to be completed in first half of 2012.

1René Obermann, CEO Deutsche Telekom: We have achieved the best solution for our company, our customers and shareholders. This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data. We will be able to focus more on the opportunities of a modern infrastructure in Germany and Europe, as well as in Internet products that accompanies to our strategy “fix, transform and innovate”. Following our initiatives of finding a solution for our activities both in the United Kingdom and Poland, we have with this transaction nearly accomplished the “fix” part of our strategy. We will now focus our resources more on the “transform” and “innovate” blocks of our strategy in order to accelerate the transformation of Deutsche Telekom.”

Timotheus Höttges, CFO Deutsche Telekom: “As the biggest single share holder of AT&T we will also significantly benefit from their strong dividend. With the excellent result of this transaction we will be able to continue to develop our company. At the same time we will be able to reduce our debts and initiate one of the biggest share buy back programs in both Germany as well as in the European telecommunication industry.”

Deutsche Telekom is planning to reduce its debt by approximately 13 billion EUR. Approximately 5 billion EUR are planned to be used for share buybacks after closing and required resolutions in accordance with the legal requirements .

Randall Stephenson, CEO and Chairman AT&T: “This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed wirelessly connected America.”

For Deutsche Telekom the transaction after closure will provide amongst others a consolidation of the balance sheet. Pro forma the ratio for net debt to adjusted EBITDA in 2010 will be reduced to 1.9x from 2.2x, a reduction of 31 percent.

2

There will be no change regarding the shareholder remuneration policy which has been set for three years. As has been provided within the legal guidelines, Deutsche Telekom will continue with its plans to pay out 3.4 billion EUR on an annual basis consisting of a minimum dividend of 70 cents plus share-buybacks. The share buybacks amounting to approximately 5 billion EUR, which are planned after the closure of the transaction, will come on top of this.

The Guidance for 2011 remains unchanged. For the financial year 2011 Deutsche Telekom expects an adjusted EBITDA of around 19.1 billion EUR. The free cash flow is expected to be stable to slightly growing from the 2010 level of 6.5 billion EUR.

Deutsche Telekom is to receive one seat on AT&T’s Board of Directors.

Morgan Stanley acted as lead financial advisor and issued a fairness opinion to the supervisory board of Deutsche Telekom. Deutsche Bank and Credit Suisse acted as financial advisors for Deutsche Telekom.

Deutsche Telekom was advised by Wachtell, Lipton, Rosen & Katz (M & A, N.Y.C) as well as Cleary Gottlieb and Wiley Rein (antitrust and regulatory law, Washington D.C.).

About Deutsche Telekom

Deutsche Telekom is one of the world’s leading integrated telecommunications companies with around 129 million mobile customers, approximately 36 million fixed- network lines and more than 16 million broadband lines (as of December 31, 2010). The Group provides products and services for the fixed network, mobile communications, the Internet and IPTV for consumers, and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in over 50 countries and has around 247,000 employees worldwide. The Group generated revenues of EUR 62.4 billion in the 2010 financial year – more than half of it outside Germany (as of December 31, 2010). For further information on Deutsche Telekom, please visit www.telekom.com/media

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation’s fastest mobile broadband network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile broadband and emerging 4G capabilities, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verse® and AT&T ?DIRECTV brands. The company’s suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com

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  • ihatefanboys

    I guess there are very few of us that understand the words involved here. This means that AT&T and TMO’s networks are going to combine, into a much better network for both. the way u guys are acting, its like u think tmobiles network is shutting down and we’re all joining just At&ts network, its not that. but then again i can read beyond the first line of any article, and i have the capacity to understand what im reading. not like most of u whining, crybabies. Ive read every article so far on this and it seems like nothing but a PLUS. Assuming anything at this point is retarded. lighten up, go have a drink, get laid.

    • Mallorian

      most people aren’t pissed about the network getting better or worse, they’re pissed because once their contract with tmobile expires they will be forced into one of att’s overpriced plans for fewer features. they are also pissed because att’s customer service sucks. they are pissed because they enjoy features on their current tmobile phones that att doesn’t allow like side loading apps and wifi calling.

      att customers will benefit from having tmobile’s spectrum with fewer dropped calls and faster download speeds. the opposit will happen to tmobile customers because of the massive influx of att customers using tmobile’s spectrum. they will start to expierence some of the same things, albeit not to the same degree as att customers have. the reason tmobile has so few dropped calls and higher 3g/4g speeds is because they have far less network congestion than att.

    • Anonymous

      You really aren’t getting the picture here. We are not upset about the expansion in coverage and reliability. We are upset about the fact that this is an end to an era. The T-Mobile BRAND (and all that it has stood for) is being consumed by AT&T, which was consumed by the total consumer un-friendly SBC, which the original AT&T consumed Cingular. Consumer option is coming down to just two choices. CDMA or GSM with (essentially) there only being 1 company supporting either technology. There’s more. These two companies also pretty much have the market on land based telecommunications as well. Verizon owns the entire eastern seaboard and more and SBC/AT&T owns everything west of the Mississippi, excepting the Qwest areas. There’s gotta be some anti-trust kind of thing going on here.

    • Anonymous

      Yeah, you people calling us ingorant have just been paying too much for too long. You need to wake the fck up!! Tmobile was an underdog and because of that they weren’t raping us every month in charges like At&t… Better network = higher prices. A lot of us don’t want a “better” network. We want to keep our great plans. At&t better use lube that’s all i can say!

      • Wired_flesh

        my t-mobile contract is null and void as soon as at&t decides to “change my plan” by making my mandatory data service for my google powered phone useless with the “no more t-mobile 3g” …..i mean don’t get me wrong i hate sprint, and verizon, but i hate at&t the most…..they screwed me when they bought cingular and now this? i’m not 15 anymore at&t…..don’t let them fool you, they will tell you that you have to upgrade but the truth is that once they buy t-mobile and the brand name goes away so does your contract with at&t.

    • Anonymous

      Yeah, you people calling us ingorant have just been paying too much for too long. You need to wake the fck up!! Tmobile was an underdog and because of that they weren’t raping us every month in charges like At&t… Better network = higher prices. A lot of us don’t want a “better” network. We want to keep our great plans. At&t better use lube that’s all i can say!

    • Anonymous

      I don’t think you get it. The networks will still be incompatible even after the merger (GSM is the only commonality, not 3G or 4G). The TMO network will not be expanded on or further improved. We will not see HSPA+ 42. Any speeds approaching that will have to wait for ATT LTE. Additionally, TMO was a large spoiler to both ATT and Verizon on plan price and value. Without that spoiler, there is less pressure to drop prices, innovate, or compete. ATT’s culture is antithetical to TMO when it comes to plans and customer service. There is no “combining the best and brightest” the larger company simply absorbs a smaller. The culture at ATT will largely be insular to the small influx of TMO employees. This is a loss to of not just the TMO brand, but also what it brought to the table. Do you think ATT will EVER win a JD power award for customer service? Much less 8 years in a row… Do you think ATT will ever be voted to the Ethical 100 list?

    • Parkchristoph

      You sound dumb enough to be a satisfied AT&T customer….ha! Lmao

    • Mj3martin

      How dare you call us crybabies. If you think AT&T is better, then you go with them, but I’m not.
      It’s not a plus when T-Mobile customers rates are going to go up after the merger goes thru.

  • Going_home

    “The merger still needs US regulatory approval.”
    We can only hope the regulatory board will end or nightmare.
    Sprint would have been a better choice from a customer perspective.
    The big two are pathetically customer unfriendly.
    :-(

  • guest22

    I really bad for the TMO reps. In my experience they’ve almost always given first class customer service. I hope during the merger ATT gives the TMO reps priority since they’re so much better than than the ATT folks, but knowing ATT I won’t hold my breath.

    • KSOut

      AT&T reps are unionized, they have someone to fight for their jobs. But lets hope that AT&T wants TMO reps for their service skills.

      • Guest

        T-Mo reps ARE NOT unionized… Sorry bud… It sucks for us…

    • Jose1987

      it a small chance i can tell u first hand ……… t-mobile call center are in shock and really upset about this. let me put it this way NO MOTIVATION so u can expect a drop off on quality, so i u call and get not energy or a person eager to help Smile i u hear ” WELCOME TO T-MOBILE THE NEW A&TT HOW CA I HELP YOU” please roll in your floor laughing because in a million years i wouldnt thought i said this two companies after the show down and the TV commercials with the Iphone 4 and my touch 4G. Well in short words suck to be a T-mobile rep right now.

      P.S. so much for magenta pride

      • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

        any TMO rep that drops their quality in call handling shouldn’t be a TMO rep to begin with. our customers come first. they always have, they always will. yes, this is a shock to our system but our core values are still there. we will not be brought down. and in the end, as i have aid repeatedly: att network coverage+TMO values, customer service and technology could/should= some really amazing opportunities.

        • Yuribeast

          anyone else think Ms M is working for AT&T?

      • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

        any TMO rep that drops their quality in call handling shouldn’t be a TMO rep to begin with. our customers come first. they always have, they always will. yes, this is a shock to our system but our core values are still there. we will not be brought down. and in the end, as i have aid repeatedly: att network coverage+TMO values, customer service and technology could/should= some really amazing opportunities.

      • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

        any TMO rep that drops their quality in call handling shouldn’t be a TMO rep to begin with. our customers come first. they always have, they always will. yes, this is a shock to our system but our core values are still there. we will not be brought down. and in the end, as i have aid repeatedly: att network coverage+TMO values, customer service and technology could/should= some really amazing opportunities.

  • Bob

    Good lord people, its going to take 12 months before the deal gets finalized! Enjoy your time on tmo until the change actually starts. Oh and if you have a tmo plan it will be grandfathered when the transition starts.

    • Colombiatulua

      David Thanks for covering this news until now. I do not know what think of you after this news. where were your NINJAS???????????????

    • Notalk

      Prior AT&T acquirees rate plans were not grandfathered. Why would you think T-Mobile customers would be different?

  • Nervous

    How bad will the layoffs at T-Mobile be? Will they start letting people go immediately? My assumption is that a lot of projects are just going to get stopped and there wont be much work to do. This is making me quite nervous.

    • Ron Dickerson

      That’s what I’d suspect. DT is desperate to sell off Tmo, so i’m sure they’ll do whatever ATT needs/wants them to. You can bet there’s going to be little to no more devices launching this year since their data capability is going to be supplanted by LTE, plus people will just start going to ATT instead of Tmo stores since it’s going to be ATT eventually anyway. It’s only going to get much worse for employees until the lucky ones keep their jobs with their new overlords.

  • Scwrath88

    Do not panic yet. Definitely do not panic. The US regulatory commission must approve this massive consolidation of the wireless industry bringing together just 2 dominant carriers, the commission likely will foresee the future acquisition of Sprint by Verizon and crush this deal. The protection of higher rates and fewer choices by big company mergers is their job. This deal won’t happen, there’s no way the commission will approve, and if they do, we all have bigger problems than just worrying about our cell companies.

  • Petey

    Gosh, I can’t believe this news! I first signed up with AT&T Wireless back in 2002 then Cingular bought them out (or something), then it changed to AT&T, and that’s when I left AT&T for T-Mobile… Now if this does happen… smh. I’m just speechless.

  • Anonymous

    I can’t believe this :(. Does at&t not know many people will leave by doing this and probably even sprint will go in second and verizon will grow even more?? Ahh nooo I hope this doesn’t happen

  • Anonymous

    I feel bad for anyone who may have just recently left AT&T for Tmobile. You can run, but you can’t hide.

    http://www.transdgtl.com/

  • TimeToDustOffTheOleResume

    Yay for the new German CEO…..
    This will strengthen our position in *****Europe******, whilst we are still participating in the rapidly growing business of mobile data. We will be able to focus more on the opportunities of a modern infrastructure in *****Germany and Europe,*********** as well as in Internet products that accompanies to our strategy “fix, transform and innovate”.

    • Oudy525i2000

      At&t is not filled with dumb folks… they know to call uncle sam first before they sign a multi billion dollar deal.

      this deal will go through. People will get laid off.

  • http://pulse.yahoo.com/_6JUK2RDOPHCULTIFWTNRVQ4PYQ JonathanW

    jesus christ. why couldn’t verizon buy us out……….when does the lg optimus come out so i can get i a good mood. heres to all the sheep who wanted the iphone. congrats! baaabaaabaaabaaa

  • Anonymous

    What does this mean for Android?????? No more outside market apps? wtf… Nobody likes AT&T why oh why screw us like this T-Mobile?

    • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

      tmo emp here, android is owned by google, not any of the carriers. android apps will not change.

      • Anonymous

        Android apps won’t but thats not what im worried about AT&T doesn’t allow outside market ability on their devices. While Android is owned by google the operating system is freely modifiable by the carriers and this is why there are so many variations of android i.e. motoblur, touchwiz, sense, expresso sense, stage ui, and so on. If t-mobile becomes AT&T HSUPA will be disabled on everything except iPhones as well as outside market apps won’t be able to be installed without rooting. T-Mobile is the only company with so many stock Android phones. Sprint doesn’t even have 1 AT&T doesn’t have 1 other than N1 Verizon had the original droid. Where do we go for stock android experience now? Lets not forget that almost everyone besides t-mobile doesn’t allow free tethering.

  • Geraldlieteau

    What happens to the Tmobile employees?

    • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

      TMO has always taken care of us, do you really think DT didn’t put in clauses to ensure we will still be taken care of? c’mon now people…..stop panicking yet….it isn’t even approved yet. lets look at the upside….at&t cust care is horrid, now they are bringing in the best of the best. they want more than just our spectrum. they want our people that know how to treat our customers as part of the family instead of an account number. they want our JDP awards. as long as they keep our values and we all remain positive and continue doing what we do, this could be a very good thing. all the gripes and complaints about at&t i’ve had myself from personal experience, but all of us here at TMO are bringing a lot to the table so that in the future those complaints will be non-existant.

  • Anonymous

    Gas prices will rise as a result lol jk but fuckkk man this sucks.

  • Crazyraiderfan

    As a t-mobile employee i am worried for my job, but i work at a corp store not a 3rd party. At&t does not use 3rd party stores as much as t-mobile so i think first to go will be those store and it sucks in a way. If you work at a corp it’s a bit more positive, i dont think they will close well established stores why do that when they want previous customers to come back and make the change.

  • Anonymous

    I can’t wait to see txt message from ATT/T-mo… “It looks like you’re tethering on an another device. We gladly upgraded your service to $45/month for 4gb of data and tethering. (–you’ve never needed unlimited and we’re glad to rape you in the kister for it–)”.

  • Anonymous

    vipshopper.us

  • Anonymous

    This makes me even more glad I jumped ship to Big Red 4 months ago.. I have never looked back. BTW what are you going to call this site now?? Deathstar News?? Muhahahahahaha. Flame away and enjoy the cluster frk.

  • Cez

    All I can say is here I come Verizon. The moment the transaction takes place i will cancel my tmo account and run to Verizon, maybe Sprint but i will have nothing to do with att they are they are the worst and like to steal money from their customer (personal experience).

  • Cez

    All I can say is here I come Verizon. The moment the transaction takes place i will cancel my tmo account and run to Verizon, maybe Sprint but i will have nothing to do with att they are they are the worst and like to steal money from their customer (personal experience).

  • Anonymous

    I wonder how many T mobile customers will be thrilled at the prospect of becoming AT@T customers. IF I was one of them, I would not renew my contract when it expires. I would get a prepaid phone, like Straight Talk, which is offering a range of phone, including smartphones, at half the price of any post paid company.

  • Punisher2all

    AT&T buying out Tmo??? WTF, this makes the Tmo-Sprint merger sound like a dream! C’mon Tmo, how could you let this happen? Screw you ATT!

  • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

    for everyone that is complaining about AT&T’s customer service……look at it this way: AT&T WILL BE GETTING ALL OF US, THE AWESOME TMOBILE REPS THAT YOU LOVE TO WORK WITH!!! All of these reps have the same core values instilled in them, if not they wouldn’t be T-Mobile reps. do y’all think we are going to lose those values? we love our customers, and even if’/when this goes through, we will still be taking your calls. AT&T can buy out our company, but they can’t buyout our individual values and beliefs in making every customer experience the best of the best. we didn’t win 8 JDP awards without earning them. think positive!!!

    • Anonymous

      I love your optimism…but they are not going to keep a lot of you guys. Especially if you are not in one of the top rated call centers, add location in the US to that. They MAY??? adopt some of the policies and have some of the older/seasoned employees train the old ATT staff in how to do it, but in the long run a lot of employees including myself will be out.

      • http://pulse.yahoo.com/_BBP7S6MBU4XVM2ORBUDRM6HNXA Ms.Mischievous

        our center is within the top three every month. and just keep thinking positive. remember, dt will have a seat on the board so we still stand a chance. stay positive, stay focused, and don’t let our customers or TMO down.

        • Aerofanbig

          lol you think DT gives a crap about the US Tmo employees? The vast majority of you guys are going to be out of a job. DT won’t care, they will only own 9% of US shares. AT&T obviously cares nothing about customer service, so no, they’re not going to keep you. And AT&T is unionized, you think any of the current Tmo employees have much shot with keeping your current wages, hours, benefits, vacation time, etc? Nope. Quit dreaming

        • Suxthisnews

          Your negativity sucks….I think everything you said was spot on though…employees at tmo will get a severance thatwill be nice. Now more than ever one should mind p’s and q’s or you will be fired for sure

  • Missmiko22

    For all the complainers….imagine this….if this acquisition does NOT get approved, your beloved MAGENTA will go BANKRUPT within the next 3 yrs. The fact of the matter is, there are still several wireless providers to go to, so there is definitely no monopoly. Speaking from the standpoint of a T-Mobile employee for over 4 yrs. we have seen the company make several changes. Changes are inevitable, they are apart of life. We just have to make the best of what we have now and expand on that best. Instead of focusing on the negative, focus on the positive….besides y’all were crying for the ipad/iphone anyway so now you just might get it…

    • Anonymous

      GSM, CDMA, and Wimax are completely different for those that want a GSM provider AT&T will be the only option. Then even more so Verizon will take sprint then there will only be 2 a CDMA and a GSM provider. I don’t give a rats ass about the iPhone nor any apple mobile products. In 3 years T-Mobile could also not be bankrupt

      • free2think

        It’s also very possible that T-Mobile will remain separate from AT&T and just act as an independent AT&T owned retailer. The point is everything is still it’s early stages so this merger may not happen. The most positive thing is to wait things out.

    • Creamcorn23

      I would really like to see this comment after you were one of the “thousands” to get laid off because of this merger. If it is approved that will allow AT&T to make $40 billion in cost cuts. According to Fox buisness: “The companies see the acquisition closing within 12 months and creating more than $40 billion in cost savings. The deal is likely to result in thousands of job cuts.”

  • Sunshinebabe2349

    I was with AT&T . It was my First contract cell phone I ever had. I loved them. I never had a dropped call anywhere. I could get service in my Mom’s small 800 pop town but with T-Mobile you lose service in lots of places. I hate them they sux but I am sticking with them till AT&T buys them out an yes I really do hope it does go thru.