at&t / T-Mobile Merger – Not so Fast

According to a new report from the Wall Street Journal, the sale of T-Mobile USA to at&t may prove to take much longer than initially expected to go through, as regulators such as the Federal Communications Commission (FCC) are allegedly against the idea of seeing the fourth largest U.S. wireless provider disappear. In an interview with FCC officials, WSJ was told that “there’s no way the chairman’s office rubber-stamps this transaction. It will be a steep climb to say the leas.” In other words, at&t will have have to make significant concessions for the deal to be approved. One of the FCC’s goal is to keep the U.S. wireless marketplace competitive for consumers, and the acquisition of T-Mobile is perceived as a step backwards, rather than a step forward, as at&t sees it. at&t, based in Dallas, Texas, is fairly confident about the deal, as company representatives told the WSJ that the company “understand[s] that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. […] We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish.” Note that at&t could lose $3 billion if the deal doesn’t materialize. So far, only Sprint voiced its concerns to the FCC, as the T-Mobile/at&t deal would render the Kansas City company vulnerable, and could potentially force it to merge with other smaller competitors such as MetroPCS and U.S. Cellular, to remain relevant. Verizon, the current largest wireless provider in the U.S., declined to comment on the deal. Interestingly enough, both companies had to undergo the same approval process several years ago, as Sprint purchased Nextel in 2005, and Verizon bought Alltel in 2008. Both acquisitions raised the same concerns, but eventually went through, after Sprint and Verizon agreed to walk away from some market, and sell some of their wireless spectrum to their competitors. T-Mobile fans eagerly waiting to be able to use an iPhone on their favorite network will have to be patient, as it could take well over a year before T-Mobile’s network is merged with at&t’s.