AT&T will buy T-Mobile USA for $39 billion in cash and stock, easily making AT&T the nation's largest wireless carrier, ahead of top-ranked competitor Verizon Wireless and reducing the number of major national wireless carriers from four to three. Consumer groups are sure to object because of concerns over market consolidation and less competition, but some analysts said the deal makes sense and won't lead to higher prices. Rumors circulated last year that T-Mobile was expected to be sold, possibly to third-place Sprint, so AT&T's emergence was somewhat of a surprise.
The deal, announced on today by both AT&T and T-Mobile's parent Deutsche Telekom, has been approved by the boards of both companies. Under the deal, Deutsche Telekom would receive an 8% equity stake in AT&T and a board seat. The transaction is expected to close in 12 months, the companies said. AT&T said the deal will add T-Mobile's 34 million customers to AT&T's 95.5 million total subscriber base (at the end of 2010), enabling a quicker expansion of 4G LTE wireless networks to the entire subscriber group of about 130 million. By comparison, Verizon had 94.1 million subscribers at the end of 2010 , although Verizon and AT&T count them somewhat differently.
