AT&T Prepares Two-Track Plan Hoping To Save T-Mobile Takeover Deal

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With the Department of Justice lawsuit setting AT&T back on their plan to quickly finalize their $39 billion dollar proposed takeover of T-Mobile, they are preparing a “two-track” plan to save the deal. AT&T hopes that any such two-track plan will allow them to find a settlement that will stop the lawsuit from reaching court.

“AT&T is pretty determined that they can find a solution, and they are pretty confident,” one of the sources said, requesting anonymity as the talks are private.

While the exact details of the two-track plan are unknown Reuters is reporting that the first part of the offer is for AT&T to guarantee that it won’t raise the prices of T-Mobile’s current voice and data services. The second part of the two-track plan is for AT&T to divest up to 25% of T-Mobile’s spectrum and customer base. A major concern expressed by government regulators is that AT&T would control more than 50% of 17 different markets  across the US should the T-Mobile deal complete. It is unclear who would be eligible to purchase these assets as the anti-trust teams at the government are unlikely to let Verizon and Sprint scoop up every last bit of divested T-Mobile assets and customers. Regional carriers might not have the assets to pick up divestitures from T-Mobile so it will be quite interesting to see how AT&T will present this deal to regulators.

AT&T has furthermore asked for an expedited hearing with the Justice Department and the randomly selected Judge, U.S. District Judge Ellen Segal Huvelle has a reputation for speedy rulings. One source from the Reuters story expects that the case could go before a judge in as little as two months.

“It is always scary to go off to litigation. I suppose there’s a chance that the government could get cold feet,” said Stephen Calkins, who teaches law at Wayne State University.

It’s clear that AT&T is preparing to fight this deal down to its last breath and Deutsche Telekom, with no Plan B for T-Mobile post-AT&T talks is following AT&T wherever they may lead. AT&T is obviously hoping to avoid paying Deutsche Telekom $6 billion in cash and other assets as part of an arrangement should the deal fall through and will use all the money and lawyers at its disposal to continue this fight.

Reuters 

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  • http://profiles.yahoo.com/u/35HLVJSI34LMH5M274SCGWDZBY mike

    Don’t divest me to Bob’s Mobile, thx but no ATT. Go DOJ!! (can’t believe I just said that)

  • http://profiles.yahoo.com/u/35HLVJSI34LMH5M274SCGWDZBY mike

    Don’t divest me to Bob’s Mobile, thx but no ATT. Go DOJ!! (can’t believe I just said that)

  • Brianvb

    AT&T isn’t even making sense here???  The Justice department and many senators stated the main problem was lack of competition after the merger.  So AT&T STILL is saying (as a solution) they will remove one of the 4 major competitors but will sell off chunks of it?  This improves competition????  Really???

    Think of better ideas AT&T–the governments wants 4 carriers who are competitive (period).

  • ItsMichaelNotMike

    My Conclusion: This is FAR MORE INTERESTING AND AMUSING than any phones T-Mobile or AT&T might debut.  But this is not the best way for T-Mobile to get on the nightly news.

    Query: I have not read anywhere on the Net how this brouhaha is going to affect T-Mobile subscriber count for the next few quarters.  Any opinions?

    I’m assuming this kind of consumer-perceived instability and uncertainty makes things even worse for T-Mobile, e.g., even more people leaving and fewer new subscribers.

    To be sure, users don’t understand the intricacies of the Clayton Act. All this negative “free advertising” on the nightly news conveys the
    impression that T-Mobile is a company in trouble and that “the Germans
    may take its ball and go home.” 

    A company offering itself for sale, talk about poor customer service, subscriber defections, and declining new accounts does not comport with prospective subscribers demanding that when a phone or service goes on the fritz there will be someone “in the building” to answer questions and that the Company with whom they signed a $2,000 contract will be in existence a year from now.

    Since T-Mobile loves JD Powers so much (T-Mobile pays a lot of money for that “love”), T-Mobile should enlist JDP to poll: A) What consumers know about all this; B) Has this affected their decision on which carrier to go with; C) In what way; and D) Which carrier are they planning to sign up with or renew, and why. Of course AT&T could care less about such poll since they don’t want most T-Mobile customers, and maybe DT brass does not want the Board to see the results of that study.

  • ItsMichaelNotMike

    My Conclusion: This is FAR MORE INTERESTING AND AMUSING than any phones T-Mobile or AT&T might debut.  But this is not the best way for T-Mobile to get on the nightly news.

    Query: I have not read anywhere on the Net how this brouhaha is going to affect T-Mobile subscriber count for the next few quarters.  Any opinions?

    I’m assuming this kind of consumer-perceived instability and uncertainty makes things even worse for T-Mobile, e.g., even more people leaving and fewer new subscribers.

    To be sure, users don’t understand the intricacies of the Clayton Act. All this negative “free advertising” on the nightly news conveys the
    impression that T-Mobile is a company in trouble and that “the Germans
    may take its ball and go home.” 

    A company offering itself for sale, talk about poor customer service, subscriber defections, and declining new accounts does not comport with prospective subscribers demanding that when a phone or service goes on the fritz there will be someone “in the building” to answer questions and that the Company with whom they signed a $2,000 contract will be in existence a year from now.

    Since T-Mobile loves JD Powers so much (T-Mobile pays a lot of money for that “love”), T-Mobile should enlist JDP to poll: A) What consumers know about all this; B) Has this affected their decision on which carrier to go with; C) In what way; and D) Which carrier are they planning to sign up with or renew, and why. Of course AT&T could care less about such poll since they don’t want most T-Mobile customers, and maybe DT brass does not want the Board to see the results of that study.

    • Anonymous

      I think it’s going to hurt T-mobile subscriber count.   It will create a hefty amount of customer confusion in the marketplace as customers won’t know who they’ll be with in six months.  Easier to just jump ship and chase after the iphone with AT&T and Verizon directly than a carrier that hasn’t laid out a clear mission to support customers.  I know i’m already holding off on renewing my contract because i do greatly perceive that same “instability and uncertainty” that you mentioned.  That’s why T-mobile USA will need the $3 billion to repair all the damage if this doesn’t go through.

      Just look at all the comments by T-mobile employees.  They are basically living in fear and not knowing what is going to happen to their jobs.  With the DOJ trouble, their jobs are in even bigger limbo as you can expect a long dragged out fight.

    • Government Fromage

      I can tell you how it’s going to affect this subsriber of over 10 years.  I’m just about sure I’m switching out.

      My phone is on its last legs and needs replacing. I’m trying to make it last until October-November when the new lineups arrive for holiday sales. Some of the new Android offerings from T-Mobile look really nice, but I don’t think they’re enough to make me hang on. I don’t feel like investing $500 of my hard earned money when I don’t know what the future of the company is. I wouldn’t have been thrilled with AT&T taking over, but at least I’d know what’s going on. This limbo right now doesn’t please me.

      Aside from the uncertainty about the future, I’ve had an awful time with T-Mobile lately. I upgraded two of the phones on my family plan, and the CSR botched everything that could she possibly could. About 10 calls and 3 weeks later, it has mostly been iron out. (Long after I sent back the two new phones because they had no reception at my house.)

      I’m probably going with either AT&T or Verizon. Sprint’s an option, but they have problems of their own. I know whichever way I go I am going to be paying more per month, and that’s fine with me.  I know I’ll get better coverage at home and not to mention in all of the dinky little towns around me where T-Mobile conks out.

      It’s been a good go with T-Mobile over the years. I won’t say I’ve been a loyal customer. I’ve been apathetic about looking at what else is out there. The rates are cheap, so eh, why look elsewhere?

      (And on a side note, if T-Mobile wants to increase their customer base, they really need to start andvertising the hell out of their phones. They’ve got some great Android devices coming this fall. Unfortuantely, I predict that once again instead of focusing on them and what they can do, they’ll instead feature some lady in a magenta dress that high school boys will drool over)

    • Dewey Cox

      Since the “news” broke, sales traffic is down in ALL stores in our market. Our stores are still busy with service, but that doesn’t pay the bills.
      Really, who would want to commit when the future of the company is either in limbo or becoming AT&T?

    • derek 21

      BC THEY DON”T CARE. people complain about coverage and getting throttled, not enough phones and then when something comes along that would change atleast two of those notions  YOU COMPLAIN. they don’t care nine times out of ten when you tell someone they got to pay 800.00 to leave cuz they just got phones you know what they do NOTHING. they don’t go anywhere.

  • James Bond 007

    Rumor has it T-mobile may receive $5 billion in additional damages for damage to the T-mobile brand. There’s also rumors the Bush Administration and Senators and Congressmen from Texas will be brought up on war crimes over the merger. Everything is not bigger in Texas. We do things different in Texas. They will pay.

  • MIKEEEEE

    this deal should have never been started in the first place.

    i’m patiently waiting for the ETF window to open.

  • Armyhunter

    You people posting your two cents sound like a bunch of babies. NO ONE CARES WHAT YOU THINK!!!!!!!!!! your ignorance is making the rest of the logical world laugh. For one you don’t know whats going to happen. two if it does happen it still leaves healthy competition for the other wireless providers. if they want to make it they obviously need to step up there game. But in reality the materialistic values with which you are portraying make you sound foolish. Thats right i said you’re a fool. i hope this “blogging” makes you feel better about yourself because quite honestly you sound like a 2yr old who isn’t getting their way. Be real people just because you are making enough money to pay your own cellphone bill doesn’t mean you should voice yourself. honestly you should be thankful that you have a phone. So please people shut up and post something that actually makes sence  and people actually care about.

    • Zifnab2k

      Right back at ya. Pretty sure no one needed your comment on this. If the internet wasn’t made to anonymously voice your anger about a certain product or event, what’s the point of the internet? Perhaps you should spend more time not reading people’s comments and getting angry at nothing.

      • Soada101

        isnt is sense? jw :P also i understand what you are saying but sitting there and being quiet make u soft and weak. if EVERYONE just sat there and voiced nothing then the laws wouldnt have been in place for them to be getting sued. so just sit there shut up and take it up the Fannie buddy?

  • Anonymous

    wow,., I just got a $829.99 iPad2 for only $103.37 and my mom got a $1499.99 HDTV for only $251.92, they are both coming with USPS tomorrow. I would be an idiot to ever pay full retail prices at places like Walmart or Bestbuy. I sold a 37″ HDTV to my boss for $600 that I only paid $78.24 for.
    I use EgoWîn.com

  • Anonymous

    wow,., I just got a $829.99 iPad2 for only $103.37 and my mom got a $1499.99 HDTV for only $251.92, they are both coming with USPS tomorrow. I would be an idiot to ever pay full retail prices at places like Walmart or Bestbuy. I sold a 37″ HDTV to my boss for $600 that I only paid $78.24 for.
    I use EgoWîn.com

  • derek 21

    The idea of reading yall saying you really care who your company is going to be in six months is rather humorous, nine of out of 10 customer’s are always looking for the next company they can get a free phone from or a promotional price that last six months lol, or ready to switch the moment something doesn’t go their way like children. why would you sit on here and lie saying you base your next upgrade or renewal on how many cust a company is going to have, or how displeased you are that our GOVT not at&t n tmo take a year to tell the consumers they “care so much about” whether is deal is happening or not. hunter said it best no ONE KNOWS.