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

Reducing security risks from open source software

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". ®

Eight steps to building an HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
Bose says today IS F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.