AT&T SAID it would take a $4 billion charge in case its takeover of T-Mobile USA fails, reflecting the dwindling chances for the deal seen as job-destroying by powerful political opponents.
The US telecoms group and T-Mobile owner Deutsche Telekom, said they would continue to pursue anti-trust approval for the $39 billion takeover from the US department of justice but withdrew for now applications to the industry regulator. “AT&T and Deutsche Telekom are continuing to pursue the sale of Deutsche Telekom’s US wireless assets to AT&T,” they said yesterday, the Thanksgiving holiday in the US. Telecoms watchdog the Federal Communications Commission opposes the deal, which would reduce the number of national mobile carriers to three while consumers are struggling and unemployment rises.
FCC approval would be meaningless if the department of justice blocked the deal, and AT&T and Deutsche Telekom said they would return to the FCC process if they secured approval from the department. Analysts said the merger, badly needed by sub-scale T-Mobile USA – the smallest of the four US national mobile operators – looked less likely than ever to succeed. Espirito Santo analysts said AT&T’s decision to take the $4 billion charge this quarter showed the company’s own assessment of the chances of success had fallen, causing its auditors to force the company to take the hit now.
“It tells us something about timing too – suggesting that AT&T may decide to walk away at the first opportunity (March 20th) rather than waiting for the ultimate September 20th deadline,” they wrote in a note. – (Reuters)
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