If you haven’t heard the spontaneous news already from yesterday about AT&T purchasing T-Mobile USA, we have all the important details for you right here. You read correctly, T-Mobile USA will now be part of AT&T, in a purchase by AT&T of $39 billion. We spare you the lengthy articles and jumbled them together and get down to the details that you, as a consumer, care about. We detail it all for you below after the jump.
What will this mean for customers?
- Provides fast, efficient and certain solution to impending spectrum exhaust challenges facing AT&T and T-Mobile USA in key markets due to explosive demand for mobile broadband
- Enhances network capacity, output and quality in near term for both companies’ customers
- AT&T commits to expand 4G LTE deployment to an additional 46.5 million Americans, including in rural, smaller communities, for a total of 294 million or 95% of the U.S. population
- Provides 4G LTE service for T-Mobile USA’s 34 million subscribers
- More than $8 billion in incremental infrastructure spend by a U.S. company over seven years, enabling nation’s high-tech industry, innovation and economic growth
- Creates substantial value for AT&T shareholders through large, straightforward synergies
Are there any complications with this merger?
- With AT&T planning to use T-Mobile’s existing 1700 MHz spectrum for future LTE rollouts, AT&T execs are saying that T-Mobile customers will have to replace their current 3G/4G phones once the merger is completed. This will be a mandatory upgrade unless of course you want your phone to work on edge only. AT&T clarifies that these device replacements won’t happen for some time, and that replacement costs were built into the purchase deal. Looks like customers might even be getting free upgrades when the time comes post-merger. “There’s nothing for them to worry about … it will be done over time, in a way that’s good for customers and good for AT&T,” says Ralph de la Vega.
- T-Mobile has clarified that for the time being until all infrastructure and non-consumer side merges are complete, AT&T and T-Mobile are still separate companies. If you want to purchase a T-Mobile phone that’s currently available don’t hesitate (but after reading the above bullet point we have to admit we would hesitate)
Gimme the statistics!
- Deutsche Telekom to receive 39 billion USD for US-business Deutsche Telekom to have up to 8 percent stake in the leading US
- AT&T takes over US mobile business from Deutsche Telekom
- Deutsche Telekom will receive 25 billion USD in cash and 14 billion USD in AT&T shares
- Attractive multiple of 7.1 times 2010 adjusted EBITDA Deutsche Telekom plans to use approximately 5 billion EUR for share buybacks
- Deutsche Telekom net debt is planned to be reduced by approximately 13 billion EUR or 31 percent