AT&T; (NYSE: T) Eyes T-Mobile USA In a Cash-and-Stock Deal
Monday, March 21, 2022 4:22 AM

AT&T Inc. (NYSE: T), a company that providestelecommunications services in the United States, said it will buy T-Mobile USAfrom Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion thatwould make it the largest cellphone company in the U.S.

The deal would reduce the number of wireless carriers withnational coverage from four to three, and is sure to face close regulatoryscrutiny. It also removes a potential partner for Sprint Nextel Corp., thestruggling No. 3 carrier, which had been in talks to combine with T-Mobile USA,according to Wall Street Journal reports.

AT&T is now the second-largest wireless carrier andT-Mobile USA is the fourth largest. The acquisition would give AT&T 129million subscribers, vaulting it past Verizon Wireless' 102 million. Thecombined company would serve about 43 percent of U.S. cellphones.

For T-Mobile USA's 33.7 million subscribers, the newsdoesn't immediately change anything. Because of the long regulatory process,AT&T expects the acquisition to take a year to close. But when and if itcloses, T-Mobile USA customers would get access to AT&T's phone line-up,including the iPhone.

AT&T's general counsel, Wayne Watts, said the cellphonebusiness is "an incredibly competitive market," with five or more carriersin most major cities. He pointed out that prices have declined in the pastdecade, even as the industry has consolidated. In the most recent mega-deal,Verizon Wireless bought No. 5 carrier Alltel for $5.9 billion in 2009.

The offer would help the FCC and the Obama administrationmeet their stated goals of bringing high-speed Internet access to allAmericans. They see wireless networks as critical to meeting that goal --particularly in rural areas where it does not make economic sense to build landlinenetworks.

AT&T said its customers would benefit from the celltowers and wireless spectrum the deal would bring. In some areas, it would add30 percent more capacity.

The shares of AT&T Inc. (NYSE: T) are trading at $27.94,up 0.72 percent.