AT&T's T-Mobile Merger Not Going Ahead: [21st Dec 2011]

AT&T have finally made it clear this week that their deal to acquire T-Mobile will not go ahead. Amid opposition for customers and regulators, it was just a matter of time until the announcement was made according to experts. In a statement released this week, AT&T have commented that the actions of the Federal Communications Commission and the Department of Justice which effectively blocked the deal do not change the fact that the industry is fiercely competitive and that spectrum is needed and that this aspect needs to be addressed immediately. As part of the deal AT&T had agreed to pay T-Mobile $4 billion as a break-up fee. AT&T say that this will be closer to $1.4 billion after the tax is written off. While the change of heart is not surprising, many still thought that AT&T would fight further for the deal. However it has been hampered by the facts that it was anti-competitive, would mean fewer jobs in the industry and would have little effect on the LTE coverage AT&T wanted. Public opposition was also a major factor in the dropping of the deal.


Verizon has recently announced that it has done a deal with the cable industry coalition called SpectrumCo. The cable companies which include Comcast, Time Warner Cable and Bright House had purchased a large amount of spectrum in an auction a few years ago and now a large chunk has been sold to Verizon. The $3.6 billion deal includes the ability for SpectrumCo to go to Verizon should they want to go wireless in the future. With the AT&T deal now dead in the water, the justice department has turned their attention to this deal. They are looking into the possibility it may be anti-competitive giving customers much less choice as all four companies will be working together. There is also concern that too much of the airwaves may be in the hands of one company. Verizon have not commented on this although the Consumer Federation of America has said that they oppose the deal as it turns rivals Verizon and Comcast into partners.


A study conducted by Online Colleges has discovered that students prefer to have a mix of online and off-line teaching rather than focusing on one of these. In addition some further research from Educause has found that 78% of students believe that having wi-fi available to them at school is extremely valuable. 60% of college students would even change schools if they didn't have access to wi-fi. However despite this use of technology at school, 30% of students claimed that their teachers needed student help to get the technology going in the classroom.


Lightsquared has posted a $427 million net loss in the first nine months of this year and it is thought that the company will be unable to continue standard operations unless it get more cash by the second quarter of 2012. A spokesperson from the company has commented that the company is OK for the next several quarters, however other experts have suggested that much of the potential of the company lies with the decision currently being made on the signal interference caused by their network. If the FCC rule against their network being able to run, it may bring the company to an end. The financial statement has noted that unless necessary financing is obtained the company may not be able to meet its commitments which include a $500 million payment to Sprint and $300 million in debt repayments. It goes on to say that if this does not happen, the company may have to sell assets or seek a purchaser.