Feeds

Deutsche Telekom: 'FCC, DoJ didn't give AT&T deal a chance'

Tried to flog T-Mobile USA and all it got was this lousy $3bn cheque

Security for virtualized datacentres

Deutsche Telekom, parent of T-Mobile USA, has hit out at US regulators over the collapse of its merger deal with AT&T in the US.

AT&T and T-Mobile USA abandoned their planned marriage yesterday, a move that was no surprise after huge resistance from the Federal Communications Commission and the Department of Justice.

Both bodies claimed that the proposed tie-up raised competition concerns, and also questioned whether the deal would provide the benefits for employment and consumers that the two firms said it would.

Rene Obermann, Deutsche's chief exec, told the Financial Times today [paywall] that the deal was never even given a chance.

"We never really got to a thorough inspection," he said, adding that the merger wouldn't have created a company that was much bigger than the current US top dog Verizon Wireless.

"Given that, I don't really understand the position of the US authorities," he sniffed.

Deutsche is very keen to offload its US subsidiary, but the tidy little pile of break-up provisions in the AT&T deal should keep it afloat for now.

The German telco is due $3bn in cold hard cash from AT&T because the merger failed, as well as a large package of mobile spectrum and a long-term deal on UMTS roaming.

"This is one of the highest payments ever agreed between two companies for the termination of a purchase agreement," Deutsche reminded its shareholders in a statement.

The firm also assured its investors that its guidance for the 2011 financial year was unchanged.

"Even following the termination of the agreement with AT&T, Deutsche Telekom expects to remain within the communicated ranges for certain financial performance indicators used to assess the financial performance of the company," it said.

"The cash component of the break-up fee directly reduces Deutsche Telekom’s net debt, thereby by strengthening the financial performance indicators affecting the company’s rating."

Obermann didn't want to be drawn on what exactly Deutsche was going to do with its unwanted American cousin, but he said the company was "working on it". ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.