While AT&T has long been working to complete a merger with T-Mobile, which would make AT&T the biggest wireless company in the industry, there have been many complaints along the way. Officials with the US government have been highly opposed to any merger, suggesting the possibility of a monopoly, which would require prompt legal action. The company would be split, much like Microsoft, to keep AT&T from completely taking over (which would make prices go up exponentially.
AT&T seemed to be pushing forward anyway, but it’s possible that the FTC and other organizations have issued more severe warnings, because the deal has officially been cancelled. While this would have been better for T-Mobile in some ways, AT&T has closed what could have been its biggest acquisition yet.
According to Kevin Smithen, an analyst from Macquarie Capital USA Inc., “They made an unprecedented move bidding on T-Mobile and appear to have miscalculated the risks and the regulatory opposition.”
AT&T was unable to convince the Justice Department, which actually sued to block the merger in August. At that time, AT&T was still trying to push forward, but apparently officials have changed their minds. AT&T would have literally spent months in nasty litigation to try to win court approval, which may not have been granted anyway depending on the opinion of the courts. They could have literally spent millions in legal fees, and they could have faced future lawsuits.
AT&T is currently the second largest US wireless operator due to numerous complaints about service and many other issues. However, this does not mean that AT&T is really suffering. The company still makes millions every year.
On December 12, the justice department decided to put their lawsuit on hold while AT&T was deciding whether they wanted to revise the deal or move on as originally planned. The delay would have made it extremely difficult to make their original deadline anyway.
So far, there are no future plans officially in place to try any deals of this size again, and we doubt the FTC would let it go through. No matter the possible profit margins, AT&T could not easily make up for the losses in legal fees, time, and the possibility that any deal would be blocked by the courts even after spending millions of dollars.
In other business, Apple and Android are still battling. While Apple products are largely offered by most big phone companies, Androids remain exclusively with Verizon, and when hacked, other companies on the same wavelength. However, Android has attracted a very specific type of customer while Apple products appeal to a wider crowd of consumers.