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Sunday
Mar202011

AT&T to Acquire T-Mobile for $39 Billion

Rodrigo Varela/Getty Images for T-Mobile(NEW YORK) -- Communications giant AT&T plans to acquire T-Mobile USA in a transaction worth approximately $39 billion.

In a joint press release issued Sunday, AT&T said it will acquire T-Mobile USA from German company Deutsche Telekom in a transaction comprising of both cash and stock. The deal would give Deutsche Telekom an 8 percent ownership in AT&T. A representative from Deutsche Telekom would be appointed to AT&T's board of directors.

What will the acquisition mean for AT&T and T-Mobile customers?

“It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people,” said AT&T chairman and CEO Randall Stephenson.

Executives say the agreement will result in improved service for customers on both networks, and will introduce T-Mobile customers to the 4G LTE network while providing them a wider range of devices to choose from.

But Sascha Segan, lead analyst for mobile at PCMag.com, doesn't believe the acquisition is good news for consumers.

“This is a really bad thing for consumers,” Segan told ABC News. “This is a very bad idea for consumers, (but) it’s great for AT&T and T-Mobile stockholders. The merged carrier is going to be more profitable, it’s going to choke down competition, it’s going to raise prices and it’s going to lower the number of options in the marketplace.”

The government must approve the acquisition agreement before it can take effect.

Copyright 2011 ABC News Radio







ABC News Radio