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AT&T will need to put a genie back in the bottle to salvage T-Mobile deal

  • TC2 Blog
  • 11/27/2011
  • David Rohde

Any glance at the business news over the Thanksgiving weekend would give you the idea that the AT&T/T-Mobile merger is dead. Once the FCC scheduled a type of trial-like hearing on the merger that forces a new, months-long review of the deal, with FCC Chairman Julius Genachowski clearly in opposition, the following happened in rapid succession:

  • AT&T said it would take a $4 billion charge to earnings in the fourth quarter to recognize the total break-up fee (cash and spectrum) in the merger conditions.
  • AT&T withdrew its merger application at the FCC, although it said it might re-file later.
  • FCC officials said that AT&T can’t necessarily do that – withdraw a merger application and think it can come back later for a completely fresh start.

Do these technicalities matter? Is the merger kaput?