Feeds

Germany gloomy over AT&T merger

Fears T-Mobile deal is kaput

Choosing a cloud hosting partner with confidence

The German government, the largest shareholder in Deutsche Telekom, is not sharing the telco's optimism that the deal to merge its US mobile operations – T-Mobile USA – with AT&T will go through.

Officials have told (paywall) the Financial Times that Berlin is increasingly worried that the deal will go down the tubes because of antitrust concerns from the US Department of Justice and the US Federal Communications Commission (FCC).

They added that Deutsche Telekom hadn't been given a full picture of the regulatory risks of the merger early enough in the process.

Deutsche Telekom and AT&T have insisted that the merger will go ahead, despite withdrawing their application from the FCC last week to avoid an administrative hearing.

Just yesterday, the German company confirmed to The Register that it was still going forward with the deal.

"Our focus, as we communicated last Thursday, is on the lawsuit initiated by the DoJ. We will submit a new application for approval, together with our partner AT&T, to the FCC at an appropriate time," a Deutsche Telekom spokesperson said.

But market observers are more or less convinced the deal is done. The DoJ is suing the two firms over the merger, which it believes will violate anticompetition laws.

The FCC is also concerned about anticompetition, and has said that the proposed union won't have the benefits that the US carriers are touting for the deal, whether for job creation or for consumers.

The only ways to pursue sharing wireless capacity, the main motivator for the deal, appear to be to continue with the merger but divest some assets to satisfy competition legislation, or to abandon the merger but push ahead with a joint venture in the US instead.

Rumours abound that AT&T has been approaching smaller US telcos such as Leap and MetroPCS to discuss selling off some assets, but Deutsche Telekom has denied that there is any 'plan B', such a joint venture, if the merger should fail.

If the telcos are forced to abandon the deal, AT&T is liable for a $4bn break-up fee to Deutsche Telekom. But the German firm will suffer too, as it will probably still want to get rid of T-Mobile USA, but won't be as likely to get a good price. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
French 'terror law' declares WAR on the INTERNET itself, say digi-rights folks
Liberté, Égalité, Fraternité: Two out of three ain't bad
SCREW YOU, EU: BBC rolls out Right To Remember as Google deletes links
Not even Google can withstand the power of Auntie
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.