In a move that garners little surprise given the news of the past few weeks, AT&T has dropped its bid for T-Mobile USA. This leaves Deutsche Telekom with few pleasant options. But first, AT&T will turn over $3B in cash and spectrum valued at roughly $1B. To the options. As recently as last week, Dish Network expressed interest in T-Mobile if the AT&T deal fell through. Another speculated possibility had T-Mobile teaming up with a cable company, since those companies (Comcast, Time Warner Cable) have held some spectrum in reserve. However, they’ve recently sold off some of that spectrum to Verizon, diminishing the logic of a T-Mobile addition. A tie-up with another telecom, such as Sprint, would seemingly be frowned upon by regulators, though a combination of the 3rd and 4th largest carriers might have different appeal (regardless of different technical standards) than that of the 2nd and 4th largest. Leap Wireless was also mentioned as a possible acquirer of T-Mobile assets as AT&T explored ways to save the deal, by selling parts of the company. Lastly, an IPO that would remove T-Mobile from DT’s hands had previously been shot down by DT management, but it would be a relatively quick way to separate the wireless carrier from it’s parent.
At the moment, and for the immediate future, independent or not, T-Mobile is in a weak position. It lost 850,000 customers through the first three quarters of the year. Its the only one of the four major carriers not building a next generation, high speed network. And its the only one not offering the iPhone. Because of the lingering discussions in trying to get the merger approved, the company has likely not focused on the competitive environment that it must face going forward. Its been strategically stagnant for nine months.
What could very well happen is an IPO, followed by a merger with another telecom or MSO when the regulatory environment changes. For now, the Puget Sound area gets to keep the last of its locally founded wireless carriers headquartered here. But there’s much static in the future.