Today’s announcement that AT&T (NYSE: T) would be buying T-Mobile USA for $39 Million — the network that Deutsche Telekom (NYSE: DT) bought for $24 billion back in 2001 — has sent shockwaves through the industry, and will raise a lot of questions around what this means for competition in the U.S. mobile industry; and what AT&T may have to give up in order to get this deal past the regulators. For now, the CEO of T-Mobile USA, Philipp Humm, acknowledged to employees that the news might be “somewhat unsettling” but he emphasized that the deal was the “best possible solution” for the number-four operator, in a memo to workers sent out earlier today.
The memo, first published by the Seattle-based blog Geek Wire, implies that it was AT&T that had approached T-Mobile, and it also brought up AT&T’s “proven track record” of past integrations.
Because T-Mobile and AT&T use the GSM mobile standard (unlike T-Mobile’s other reported suitor, Sprint (NYSE: S), which is CDMA-based), customers of the combined entity would see benefits in their services “almost immediately”, but Humm also writes that the deal could take as long as 12 months to complete. Not so immediate after all, then.
Full memo below:
I write to you over the weekend with important news. Today we announced the beginning of a new journey for T-Mobile USA. AT&T and Deutsche Telekom have reached an agreement for AT&T to acquire T-Mobile USA, positioning the combined company to create a world-class platform for mobile broadband innovation and growth. Deutsche Telekom will become the largest shareholder of AT&T.
The sale of T-Mobile USA to AT&T is the best possible solution for our business and for our customers. The merger will ensure the deployment of a robust 4G network to 95% of the U.S. population, something neither company could achieve on its own. Also, because of our compatible networks and spectrum, the customers of T-Mobile USA and AT&T will experience improved voice and data service almost immediately after the networks are integrated.
Additional details about this transaction are included in a press release attached to this e-mail.
I know this news is unexpected and may be somewhat unsettling, but I am confident that our strong culture and T-Mobile USA Values will help guide us through this process.
Bringing together these two world-class businesses will create significant benefits for our customers. T-Mobile is a wonderful business, with great employees who have always demonstrated a willingness to do what it takes to be successful. Frankly, that is exactly why AT&T expressed an interest in combining our organization with theirs.
AT&T has a proven track record of growing through successful integrations. Their leaders recognize that making this combination a success will require the talent and commitment of T-Mobile USA employees. I believe you will see that reflected in their statements and their actions. In fact, AT&T’s leadership has said keeping our talented people through this transition is one of their top priorities.
It is important to keep in mind that this transaction requires regulatory approval from government agencies; until that time we remain T-Mobile USA and must continue to operate independently. It is expected that this deal will close within 12 months. With that in mind, I ask that each of you remain focused on the outstanding work you do every day to meet and exceed our customers’ expectations.
I ask you to join me in embracing this new opportunity to build America’s premier mobile broadband company. In the meantime, continue to execute our Challenger strategy – there’s a lot of work to do in the year ahead.
I promise to make more information available to you in the coming days and weeks on OneVoice and through your leaders.
Thank you for your ongoing commitment and support.
With sincere appreciation,
CEO & President