Mobile News posted November 24, 2011 / AT&T and Deutsche Telekom have announced that they are withdrawing their pending approval application for the sale of Deutsche Telekom to AT&T with the FCC. Though the companies still specifically assert that they’re “continuing to pursue the sale” of Deutsche Telekom’s US wireless assets, AT&T has taken another move that makes it really unlikely that the deal will succeed.
AT&T has decided to take a $4 billion pretax charge on its Q4 2011 accountancy sheet, in recognition of the risk of this deal not going through. That includes a $3 billion default payment that is due to Deutsche Telekom in the event of non-completion and an additional $1 billion in book value of spectrum that AT&T would have to give up. So it looks like, on paper at least, AT&T has given up the fight.
Most likely this will be billed as a win for consumers, not many people thought that the acquisition would be a good thing for wireless service. It will also make Sprint very happy as it will not be the one left standing after the acquisition. The companies are playing this as just another step toward approval, but it looks like approval may be the last thing they expect.