AT&T and T-Mobile hinted this Thanksgiving that their merger may be off, but the unpalatable repercussions of ending their eight-month pursuit of a deal suggests they may be playing a game of turkey.Following an antitrust suit from the Department of Justice and a hearing on the merger called by the Federal Communications Commission this week, AT&T (T, Fortune 500) said Thursday it is no longer seeking approval for the merger from the FCC. The wireless giant then set aside $4 billion to cover the break-up fee it will owe Deutsche Telekom, T-Mobile parent company.
If the marriage is not to be, the breakup would be painful for both companies. AT&T would have to pay T-Mobile’s parent $3 billion and at least $1 billion worth of wireless spectrum, and it wouldn’t gain access to the T-Mobile infrastructure that AT&T hoped to use to build out its next-generation wireless network. Meanwhile, the struggling T-Mobile would have to figure out a new way to stay afloat with a business that is losing revenue.
Via: CNN.com
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