AT&T Announces $39 Billlion Purchase of T-Mobile

You might remember reports from a couple of weeks ago that said Deutsche Telekom and Sprint were hashing out a deal that would see the latter take ownership of the former’s US mobile carrier, T-Mobile USA. According to sources, the deal would have seen Sprint merge with T-Mobile USA and Deutsche Telekom retain a majority stake in the resulting entity. However, things were supposedly being held up because the two parties can't agree on a valuation for T-Mobile USA.

This past weekend, in a surprise move, AT&T moved forward and snapped up T-Mobile for itself. Worth $39 billion in cash and stocks, DT will receive an equity stake in AT&T that, based on the terms of the agreement, would give the German company an ownership interest in AT&T of approximately 8 percent. A Deutsche Telekom rep will also take up residence on the AT&T board of directors.

AT&T is hailing the deal as an opportunity for a significant expansion of 4G LTE deployment. The carrier now says it can deploy 4G LTE to 95 percent of the population, 46.5 million more people than its current goals planned for.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T Chairman and CEO.

"It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America's high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth."

The deal is expected to close in the first half of 2012, providing it passes through the usual regulatory checks without incident. Of course, that’s another matter entirely.

Jane McEntegart works in marketing communications at Intel and was previously Manager of Content Marketing at ASUS North America. Before that, she worked for more than seven years at Tom's Guide and Tom's Hardware, holding such roles as Contributing Editor and Senior News Editor and writing about everything from smartphones to tablets and games consoles.