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AT&T talking to LEAP in last ditch effort to sell T-Mo's assets.


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Migrated from Original Forum. Originally Posted 29 November 2011


I think this is AT&T's last best chance for success. I would guess that if this doesn't work then the merger is done I think to make this happen both AT&T and DT will be doing some heavy financing and offering extremely friendly terms to LEAP.









Report: AT&T 'knee-deep' in talks to sell T-Mobile assets to Leap


November 29, 2011 — 10:14am ET | By Phil Goldstein



AT&T (NYSE:T) is "knee-deep" in last-ditch talks with Cricket provider Leap Wireless (

NASDAQ:LEAP) to sell Leap substantial assets of T-Mobile USA in a bid to keep AT&T's $39 billion acquisition of T-Mobile afloat, according to a report in the New York Times.


The report, which cited unnamed sources familiar with the matter, said AT&T hopes such a deal would calm concerns at the Department of Justice, which has sued to block the deal on antitrust grounds. The report said such a sale would make Leap the fourth-largest wireless carrier in the country but would still leave AT&T with enough of T-Mobile's spectrum to make the deal worthwhile.


Leap spokesman Greg Lund declined to comment on the report, and an AT&T spokesman did not immediately respond to a request for comment.


For Leap to become the fourth-largest wireless carrier by subscribers, AT&T would have to sell Leap at least 40 percent, if not more, of T-Mobile's subscribers and spectrum, a figure that has been discussed in previous reports. T-Mobile ended the third quarter with 33.7 million subscribers, while Leap ended the period with around 5.8 million total customers. Leap's larger prepaid rival



(NASDAQ:PCS) counted over 9.1 million subscribers at the end of the third quarter.


The Times article described AT&T's attempts to sell to Leap as a "Hail Mary pass," and indeed it seems that AT&T's options to offload T-Mobile assets through divestitures are dwindling. Leap has around $800 million in cash and short-term investments, compared with $2.1 billion for MetroPCS. According to a Bloomberg report, which also cited unnamed sources, MetroPCS is not interested in buying T-Mobile customers and spectrum in as many markets as AT&T needs to sell.


Last week AT&T said it withdrew its application for the T-Mobile acquisition from the FCC so that it could concentrate on it legal battle with the Department of Justice. That trial is set to begin Feb. 13. U.S. District Judge Ellen Huvelle, who is overseeing the case, postponed a hearing in the case set for Wednesday until Dec. 9 "due to the court's scheduling conflict."

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Migrated from Original Forum. Originally Posted 29 November 2011


I think this is ridiculous. It's a desperate move by AT&T. I don't see how the FCC can find that the merger would make the wireless market uncompetitive in 99 of the top 100 markets in the U.S., but a 40% divestiture will satisfy the Feds. It won't be enough. They will just run the same competitive scenario numbers again and will find that even with a 40% divestiture the merger will make the wireless market uncompetitive in 90 in the top 100 markets.


40% is too small. Verizon had to part with almost 40% of Alltel to satisfy the Feds back in 2008. And Alltel wasn't even half the size of T-Mobile. And the market was much more diverse and competitve then.


I just don't see AT&T getting there myself. And I'm glad for it!!!

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Migrated from Original Forum. Originally Posted 29 November 2011


Yeah...there are not many wireless co's out there that are smaller than Verizon, but big enough to buy a sizeable portion of Tmo. Especially given today;s current economic environment. AT&T does not have a lot of divestiture partners that it can count on to help them out here.

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Migrated from Original Forum. Originally Posted 30 November 2011


With Metro PCS, AT&T had a chance to make this work since Metro PCS is sitting on gobs of money. Alas, they only wanted enough spectrum to expand in markets according to its business plan. Which means Metro doesn't want to be a national player. I have no clue what Leap wants to be. Maybe they want spectrum, but I don't see how they would pay for it. They only have a fourth of the capital that Metro has. If somehow they pull this off with its current model, the customer defections would be stupendous unless they think they can metamorphous into a national player overnight.

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Migrated from Original Forum. Originally Posted 2 December 2011


I think based on this article that AT&T will do a joint venture with T-Mobile if/when the court case falls through. This will be a win/win for T-mo, its customers and consumers. T-mobile would have a good chance or staying profitable and gain customers and be able to offer LTE, and AT&T would gain the spectrum it desires.


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