Sale of T-Mobile to AT&T Increasingly Unlikely

AT&T may not be able to save its acquisition of T-Mobile USA.

According to a report published by the Wall Street Journal, AT&T has discarded plans to sell off assets up to about one third of the volume of the T-Mobile deal to a smaller carrier such as Leap Wireless; the company believes that it would not be enough to get government approval for the deal. Previous reports had suggested that Dish Communications and MetroPCS may also be interested in what AT&T may have to offer.

If the Journal is right, then all talks have collapsed and it appears that AT&T is now waiting for meeting with the Department of Justice in January to find out whether there is an opportunity to make the deal work or not. Possible solutions would be an investment that AT&T could take in T-Mobile as well as the creation of a joint venture between the two companies.

AT&T claims that it requires T-Mobile's bandwidth to improve its business and service for its customers, while Deutsche Telekom, parent of T-Mobile USA, wants to get out of the U.S. wireless carrier business. However, both AT&T and Deutsche Telekom may have been too arrogant with its proposal that stated that the merger would create jobs, improve customer service and, ultimately, indicate that it would drive wireless service prices lower. The Department of Justice as well as the FCC have little faith that those claims are accurate and said stated that an acquisition of T-Mobile USA by AT&T would work against consumers' interests.