Deutsche Telekom caught off-guard by DOJ’s move to block AT&T/T-Mobile deal

By on Sep 1, 2011 at 10:15 PM
Business September 1, 2011

The U.S. Department of Justice’s decision to file a lawsuit in an attempt to block AT&T’s planned $39 billion acquisition of T-Mobile USA caught Deutsche Telekom CEO Rene Obermann off-guard while he was meeting with a team of managers and his supervisory board, a board member told Bloomberg on Thursday. Deutsche Telekom, AT&T and T-Mobile had all been confident that the deal would be approved in March of next year. Speaking during the IFA trade show in Berlin, head of Deutsche Telekom Germany Niek Jan van Damme echoed AT&T’s commitment to continue to fight for the deal’s approval. “We’re staying in it,” Van Damme said. “Other scenarios were not being discussed. When you are in a deal, you stick to that deal, a clear focus on that deal.” Obermann has said his company will work with AT&T to contest the DOJ’s lawsuit, which Van Damme seemed to shrug off. “When it comes to larger M&A deals in the US, these things happen,” he said. “This isn’t an exception. We have everything under control.” If the federal government does successfully block the deal, AT&T will be required to pay T-Mobile USA $6 billion in cash and assets.

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  • Anonymous

    so is the $6B going to T-Mobile USA or DT?? i thought it was DT…

    • Anonymous

      Spectrum/roaming agreements go to Tmobile, cash will prob pay back to DT.

      “AT&T will pay T-Mobile $3 billion in cash, a $1 billion roaming
      agreement, and $2 billion in spectrum if the Federal Communications
      Commission and the Department of Justice reject AT&T’s proposed $39 billion acquisition of T-Mobile.”

  • Delacy Sanford

    this story remains the industries top news…$6 Billion to DT which still plans to drop T-Mobile USA. I see t-mobile usa going the way of helio and espn in the near future.

  • zacamandapio

    I’m sticking with T-mobile.
    Great company, regardless of what DT needs,wants,wishes to do.

  • Chowder

    This merg will happen, if you like it or not. It’s all about money.

    • Johnny Wishbone

      If you really believe that then your a fool. The DOJ blocked the Sprint-WorldCom merger back in 2000 and within a matter of weeks the merger was called of. Although there’s a very small chance that the merger will happen, it’s very unlikely. The DOJ only files suit when they know they can win.

  • Anonymous

    Robert Dotson mismanaged T-Mobile.

    Renee Oberman sold T-Mobile out.
    Phillip Humm was put in place as CEO to acquire as many subscribers for the buy out with his “Challenger Strategy”

    And Randall Stephenson is waiting patiently to rape the new subscribers and employees of T-Mobile. 

    Dan Hesse is to Obi Wan as Randall Stephenson is to Darth Vader

    • Anonymous

      …and the domestic terrorists will go after AT&T…..

    • Anonymous

      You are 100% correct about Bob Dotson. I was with T-Mobile during his reign of incompetance. He eliminated the executives that had been with the company for years and brought in people from outside the industry to run things. Internal promotons ended and outsiders who knew nothing about the company were brought in to manage those that did. Many of these outsiders fired their best performers and brought in their friends to take their place. T-Mobile had a great company culture that was destroyed. He wasted millions on products and services that no one wanted (i.e. @Home). He refused to spend any money to market products and services to high-end business customers in favor of selling to the youth market (hence the term “Teen-Mobile”). What is unjust is that he got got to leave with millions of dollars in his pockets while so many others got unemployment.

  • Anonymous

    I’m sure this has already been said but I feel like the reason the breakup fee is so high is to give further motivation to the feds to approve the buyout.  

  • Danny

    This is nowhere near over.  

    The DOJ can sue and AT&T can appeal or negotiate.  The FCC can stop spectrum swapping but AT&T can sue back and appeal.  

    I have a feeling AT&T will negotiate with regulators to keep or add X amount of jobs, force AT&T’s hand to allow T-Mobile subs to keep their rate plans (even if they upgrade) for X amount of years, divest certain customers or markets and allow cheaper access to their wired or wireless networks for CLEC’s or MVNO’s.  

    The DOJ does NOT want to lose in a court battle to risk embarrasment so I bet you they’ll take a settlement offline.  

  • BigMixxx

    WOW, he said that really?  It’s done, they are gonna kill the planned purchase.  There is WAY to much divestiture that will have to take place to get value from the company….

    A Sprint/Clear/T mobile/and that satellite company that offers LTE deal is more likely to win over than AT&T right now…

    So if DT wants out, Sprint wants to bid, let’s see what happens…

  • Danny

    If the deal does fall through I hope T-Mobile can find a private investor or group of investors with deep pockets and entrepreneurial vision and create a solid, financially strong and world class network.  

    T-Mobile has a good national 2G network and up and coming HSPA + network in metro areas that could be expanded and solidified with more spectrum, backhaul and active cell sites. HSPA + 42 Mbps already gives current LTE networks a run for its money where deployed unfortunately T-Mobile isn’t expanding it much outside of select Metro areas and DT certainly won’t give them the money to do it justice. Such a shame and a waste.  

    • zacamandapio

      I wish Tmobile continued at an independent company and start upgrading to HSPA++++.  42Mbps then 84Mbps then 168Mbps and just keep on going.

  • Anonymous

    Deusche Telekom is selling TMobile USA to the only company with the capital and capacity to utilize their spectrum.

    And just an FYI…they’ve been working on a deal for over 2 years. To come to terms on an actual “Let’s do it” merger, it takes about 2 years to get the math and terms right.

    At&t is bringing 5000 call center jobs to the US.

    This also helps Sprint more than hurt them. Anyone not happy with the merger can jump. The only people complaining don’t have at&t.

    And here’s a tidbit for you people claiming At&t is expensive…
    Cheapest Smart Phone individual plan with 200 MB of Network Data $75, with 2GB, $85. That’s before tax because that varies. Now you get 450 minutes with rollover for land lines, unlimited texting and unlimited calls to any cell in the US.

    Cheapest family plan with 200mb data a piece is $130, 2GB is $150. 700 landline with rollover, unlimited calls to any cell on any network for both phones, unlimited texting.

    The only thing Sprint has is their slow unlimited data. $79 smartphone plan, 450 landline/roaming minutes, unlimited to cell phones, unlimited texts. $5* + enrollment fee that you can’t avoid, some people are charged this, some aren’t, I was.

    Sprint is nearly the same price or cheaper by $5, but you can always check and see if you get a discount on the rate plan through your employment.

    What’s that? No job? Get prepaid.

    • Johnny Wishbone

      Here’s a newsflash to you, At&t bringing 5000 call center jobs to the US means nothing since a large majority of T-Mobile retail employees will lose their jobs (we’re talking in the tens of thousands) which is the real reason this merger/buyout may get rejected. The DOJ doesn’t want to see an enormus amout of people lose their jobs due to this, especially at a time when there aren’t that many jobs in the US

      • Dario9

        Newsflash – att paying out 6 billion for a failed merger will result in people losing their jobs as well. Weak argument.

      • RicoRich196

        How so? Genuinely curious.

      • Anonymous

        AT&T may use that as an excuse to cut jobs, but the 6 billion will really be made up by of AT&T customers.

    • Anonymous

      Either you are clueless, or work for the PR dep’t of ATT

      For starts, 5000 jobs means squat. It’s a bribe. Nothing more, nothing less. If those jobs actually ever materialize, pigs will fly. Consider this: TMO’s call center jobs are in the US, ATT overseas. So all ATT has to do is get out of the overseas business and then the “bring the 5000 jobs back to the us” condition will be satisfied (the key being Jobs new people).

      Now, as for you claiming ATT is not expensive, I pay $75 including tax on TMO and get my unlimited data, texting and 500 minutes. (also have unlimited nights + weekends & unlimited mobile to mobile ). Want more? I’ve also got free roaming over wi-fi when abroad via UMA, and can bridge my playbook without paying an additional fee. Also, my device is not crippled with every other option disabled. You add all of that up on ATT and you are paying easily $100 + tax.

      I forgot to mention the best part of all…I’m not on a contract, nor am I forced to be on one.

      This action by the DOJ is exactly what was needed.

      • Anonymous

        So because a failing company (Tmo) decided to underprice their plans, it’s AT&T’s or Verizon’s fault for being successful and making money?? Newsflash, DT will get the cash and build their network in Europe meaning not only a TON of jobs lost in the U.S. Due to Tmobile drying up and blowing away But a TON of cash also leaving the America’s as well. Oh, and did I mention Tmobile will still fail due to DT not caring one bit. Fast forward with Sprint raising Pricing on upgrades/ETF’s/premium data…being only 5$ cheaper on a shitty network? AND good luck with keeping that unlimited plan Sprint…failblog ahead.

    • Anonymous

      Yeah…screw the unemployed. Let them eat cake! Let’s see how your attitude changes when you are handed the old Pink Slip you jackass.

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