The ramifications of the AT&T acquisition of T-Mobile USA not going through due to a DoJ lawsuit is concessions to Deutsche Telekom worth $6 billion. Obviously this is a massive number – let’s call it a potential management head-rolling number at AT&T.
So obviously, AT&T management will try everything it can to get this merger to be approved – including agreeing to sell off 25% of T-Mobile’s business including radio spectrum and customers.
The question of course is if T-Mobile USA has put so much competitive pressure on AT&T according to the DoJ, then by taking the company out – even if frequencies and customers are sold, we have, by definition, a less competitive market which hurts consumers.
Ironically for AT&T the only way the DoJ can ensure the market not only remains compeitive but becomes more competitive is to block the deal as in this case, AT&T will be forced to not only pay T-Mobile USA $3B, they will also get give up spectrum and a roaming agreement worth – once again, $6B in total (including the cash).
It seems AT&T has gotten itself into a tough pickle but you can’t count out a company which reassembled Ma Bell after it was broken up by antitrust regulators. And again, there are at least 6 billion reasons for the new Ma Bell to do whatever it takes to get some deal done.