No, look over there

19 December 2011 By Rob Cox Follow @rob1cox

The telecoms group’s $39 bln bid for T-Mobile USA has been deader than Francisco Franco for months. Now the company’s using the failed deal to fight for more spectrum. AT&T has a point – but shareholders shouldn’t let it obscure management’s risky roll of the dice.

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AT&T, the U.S. telecommunications group said on Dec. 19 that it agreed with Deutsche Telekom to drop its $39 billion bid to buy the German company’s U.S. wireless unit amid increasing regulatory obstacles to the planned takeover.

The plan to buy T-Mobile USA, first announced in March, has met with opposition from the U.S. Department of Justice and the Federal Communications Commission. In late November AT&T said it would take a $4 billion charge in case the deal collapsed, including a $1 billion book value hit for the spectrum AT&T has to give to T-Mobile USA.

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