ATT bought Tmobile.
The deal would allow AT&T, now the second-largest U.S. wireless operator, to add about 34 million customers and surpass Verizon Wireless. The acquisition may face government scrutiny because it combines the second- and fourth-largest wireless providers, reducing consumer choice. Though regulatory approval may take a year, cost savings and revenue gains could total $3 billion a year, Dallas-based AT&T said.
“Phenomenal deal if it happens,” Jonathan Chaplin, an analyst with Credit Suisse Group AG, wrote in a research note yesterday. “Huge upside for AT&T; DT getting a great price; however, we believe regulatory risk is enormous.”
AT&T rose 79 cents, or 2.8 percent, to $28.73 at 9:40 a.m. in New York Stock Exchange composite trading, after gaining as much as 3.4 percent for the largest intraday increase in eight months. Deutsche Telekom rose as much as 16 percent in Frankfurt, the biggest intraday gain on record.
Sprint Nextel Corp. (S), which had held talks with Deutsche Telekom about acquiring T-Mobile according to people familiar with the matter, slumped as much as 15 percent.
AT&T said that it would expand the rollout of its high- speed wireless technology, called Long-Term Evolution, or LTE, under the T-Mobile agreement. AT&T will offer the service to an additional 46.5 million people as part of the deal, helping achieve the Federal Communications Commission goal of making broadband available more widely, the company said.
“We studied this thing extensively over the last few months and we’re very confident it will be approved,” Randall Stephenson, AT&T chairman and chief executive officer, said in an interview. “Most local markets have a choice between five carriers, so the space will remain fiercely competitive.”
The agreement has been approved by the boards of both companies, Deutsche Telekom said in a statement.
You might think I'm nuts; but in the future I see AT&T as the global communication company of the World. Right now WiFi internet is moving towards 4G technology, the same as Phone Signals. I see AT&T purchasing the WAN backbone, I see AT&T buying out every competitor in the communication field, globally. Why? Economies of scale, better service, and if they actually build a new internet which has open source protocol, then it will make a laughing stock out of the insecure internet of today.
Watch out for Verizon! I'd short Verizon and buy AT&T long because not today; but this will be the future someday. =)
AT&T Earnings Top Expectations, Revenue Falls Short
Revenue rose to $31.6 billion from $31.45 billion a year ago.
Analysts had expected the company to report earnings excluding items of 63 cents a share on $31.73 billion in revenue, according to Thomson Reuters.
Shares of AT&T [T 35.38 0.09 (+0.26%) ] rose immediately after the report was announced.