Can Qualcomm Solve AT&T’s Network Woes?
The very same unit that catalyzed the abortion of AT&T’s proposed T-Mobile purchase has paved the way for them to acquire a smaller, but promising telecoms business. AT&T has finally closed a good deal to end the year, getting a much needed bolster with the Qualcomm airwaves acquisition. The buy came ready with the nod of the Federal Communications Commission (FCC). This deal, amounting to $1.9 billion, will give AT&T what they had initially intended when they set out to construct the blueprint of the T-Mobile buy: addressing shortage of wireless airwaves. This critical demand is brought about by the burgeoning requirement of their growing internet service arm.
Good thing AT&T had Plan B. Qualcomm’s spectrum and airwaves help AT&T get ahead of the competition, which are all making headway with next-generation networks. Data-hungry consumers are offered an array of choices from rivaling service providers, and AT&T’s overcoming a few setbacks from the past year or so, including the loss of an exclusive deal with Apple to sell iPhone devices. It was a merry Christmas for AT&T nonetheless, as the FCC clears the deal for the Texas-based telecom giant.
A portion of the FCC order reads: “…would not result in competitive harm that would outweigh the public interest benefits of this transaction.”
The FCC inhibited the AT&T-T-Mobile merger, ending tragically after months of questioning and investigations. Deemed a hard sell right from the beginning, AT&T eventually dropped its $39 billion bid for T-Mobile. The insurmountable hurdles shook the faith of both parties. In fact, Deustche Telekom, T-Mobile’s mother company, is dealing with quite a bit of pressure on their dividends.
Had the T-Mobile purchase been completed, AT&T would’ve easily become the number one telecommunications provider in the U.S., surpassing Verizon, now one of its biggest threats. In the end AT&T had to shell out $4 billion to T-Mobile for the trouble, an expensive show of interest either way.
The Qualcomm buy is a bolster for AT&T’s morale following some costly legal battles. Many thought that perhaps the biggest deal call-off in the history would damage AT&T’s acquisition-spree, which was started by its former CEO. Now that AT&T has realigned its strategy, the question now is, will Qualcomm serve the optimum purpose they had hoped for from T-Mobile? Well, at least they won’t bid farewell to 2011 empty-handed.
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