AT&T and T-Mobile Merger Application Withdrawn Over Loss of Jobs, FCC says
News broke Friday that mobile-phone giant AT&T is withdrawing its application for its merger with T-Mobile, and reports revealed that the heart of the debate with the Federal Communications Commission may have been over what is best for the economy.
AT&T is currently the second largest service provider after Verizon in the country, but a merger with T-Mobile would have propelled it to the top position. Julius Genachowski, the chairperson of the F.C.C., said this week that the merger did not meet standard approval requirements, and that blocking the motion was necessary to save competitiveness in the field, according to The New York Times.
Both AT&T and T-Mobile argued that they would still face plenty of competition from the other two big providers, Verizon and Sprint, and that they would create more jobs and try to boost the struggling United States unemployment rate.
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The F.C.C., however, found the opposite. Based on its analysis of confidential filings from AT&T, the merger would have eliminated jobs
Now that the mobile phone giant has withdrawn the application, both will have to make new plans for the future. AT&T will need to find another way to stay competitive to Verizon, but T-Mobile has been struggling for years, and may need to find another company to buy it. T-Mobile has been lagging far behind the other three top providers, and its parent company, Deutsche Telekom, will now need another solution.
In a statement after the withdrawal, the Germany-based company said: “(the withdrawal) is being undertaken by both companies to consolidate their strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice. As soon as practical, Deutsche Telekom and AT&T intend to seek necessary F.C.C. approval.”
While hopes for deal are technically not over yet, chances that the merger will get back on track are slim.
