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Talks to sell some T-Mobile USA assets as a precondition to closing a merger deal with AT&T have "gone cold," according to a report by The Wall Street Journal. Citing people familiar with the matter, the newspaper says the companies no longer believe such a deal would help persuade regulators into letting the merger go forward. They are not ruling out an acquisition yet, but AT&T is apparently already looking at other options, such as a partial takeover or a joint venture with the Deutsche Telekom-owned carrier.
Companies involved in the talks reportedly included small wireless operator Leap and Dish Network, which has shown serious interest in diversifying their business beyond pay television in the last year.
AT&T is currently the second largest wireless operator in the U.S. Should its planned $39 billion cash-and-stock acquisition of T-Mobile USA go through it would add around 34 million customers and effectively vault them into the leading position in the U.S. wireless market, overtaking Verizon Wireless.
But the companies are having a hard time convincing the FCC and the Department of Justice that a merger will not hinder competition for wireless services across the country. AT&T withdrew its merger application with the FCC in late November just days after the latter hinted it would not back the planned acquisition. They subsequently recorded a $4 billion charge against earnings this quarter to cover the $3 billion in cash and $1 billion in spectrum licenses it agreed to turn over to Deutsche Telekom if the deal faltered.
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