Telefonica and Deutsche Telekom ink network sharing agreement (Germany)
Telefonica Germany and Deutsche Telekom have entered into a long term network sharing agreement with one another. According to company reports, Telefonica Germany will use Deutsche Telekom’s network infrastructure in the future to set up 2,000 Telefonica’s fiber aggregation points so as to transmit data faster and with greater capacity.
René Schuster, CEO, Telefónica Germany, has said that the agreement with Deutsche Telekom gives them the opportunity to be cost efficient, fast and flexible in a rapidly growing market. Schuster added that they offer the best quality in one of the most advanced mobile networks in Europe.
Further, with this agreement, Telefonica Germany hopes to increase the data speed at the UMTS and LTE stations in the future.
AT&T terminates bid for T-Mobile merger (USA)
Wireless carrier AT&T’s long lasting battle to acquire Deutsche Telekom’s T-Mobile has finally come to an end, with both operators having mutually agreed to terminate the deal. The news, while being a setback for AT&T, has been greatly welcomed by the industry as a whole which believes that this outcome is beneficial for the consumers. As per the agreement, AT&T will be required to pay Deutsche Telekom a pretax breakup fee of US$ 4 billion in the fourth quarter of 2011. Further, company reports reveal that the operator is planning a mutually beneficial roaming agreement with Deutsche Telekom.
According to reports, Randall Stephenson, Chairman and CEO, AT&T has said that the operator will continue to be aggressive in leading the mobile internet revolution. He added that over the past four years they have invested more in their networks than any other U.S. company. As a result, they deliver best-in-class mobile broadband speeds connecting smartphones, tablets and emerging devices at a record pace and are well under way with their nationwide 4G LTE deployment.
Stephenson also said that policy makers would be required to enact legislations to meet the country’s long term needs as well as allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry.
German government concerned over regulatory opposition for AT&T merger (Germany, USA)
The German government which holds a 32 percent stake in Deutsche Telekom has reportedly voiced concerns regarding the regulatory hurdles for the US$ 39 billion deal with AT&T. According to reports, the government believes that the continuous opposition may cause the merger to fail.
The deal has been opposed by both the Department of Justice as well as the Federal Communications Commission (FCC) on the grounds that such a merger would have a significant impact on the competitive level of the wireless market and lead to job loss. AT&T has recently been working on a new strategy wherein it plans to sell a large portion of T-Mobile’s assets for which it has been contacting potential buyers, in an attempt to persuade the Justice Department.
In the event that the deal does not go through, AT&T would be required to pay Deutsche Telekom a breakup fee of US$ 4 billion. The two operators had proposed the merger on the grounds that the deal would help improve the network quality as well as provide users with high-speed internet access.
AT&T may seek legal action against FCC (USA)
US based mobile operator, AT&T has reportedly threatened to sue the Federal Communications Commission (FCC), in the event that the agency does not permit the operator to withdraw its application to purchase T-Mobile for $ 39 billion.
According to reports, Wayne Watts, General Counsel, AT&T has said that they have every right to withdraw their merger from the FCC, and that the agency has no right to stop them. He added that the FCC is obligated by its own rules to honor AT&T’s move to rescind its application to acquire T-Mobile USA Inc., and that any deviation from the procedure would be challenged by them in the court.
As reported earlier by Wireless Federation, mobile operators AT&T and T-Mobile withdrew their applications for the merger after the Chairman of the FCC, Julius Genachowski, had asked the commissioners to forward the proposal to an agency judge for a hearing. As per sources, the members of the FCC said that the deal would lead to a loss in jobs as well as lesser competition in the wireless market.
AT&T plans bigger asset sale to save T-Mobile merger (USA)
AT&T is reportedly planning to divest a larger section of its assets in an attempt to save the $ 39 billion merger with T-Mobile. According to reports, with this asset sale AT&T aims to address the concerns raised by the Justice Department regarding lesser competition in the wireless market.
As per sources, the size of the asset sale could be as much as 40 percent of T-Mobile’s assets. However, according to industry reports, analysts believe that the asset sale may be tough for AT&T as the number of buyers for such a sale might be small.
According to reports, as per the agreement, AT&T would be liable to pay less than the deal’s original $39 billion value if regulators demand asset sales that surpass $7.8 billion. Further, sources claim that in the event that the deal does not take place, there is no way that AT&T would get out of paying Deutsche Telekom the $ 4 billion breakup fee.
Skype steps up negotiations with mobile operators to permit internet calls (UK)
Skype technologies, a software application that allows users to make voice and video calls and chat over the Internet, has reportedly approached Ofcom, UK’s telecom authority, as British mobile operators have blocked Internet based calls on their networks. According to reports, Ofcom has said that by blocking Skype’s services mobile operators were restricting innovation and that it may intervene if the operators continue to block the services.
Mobile operators in the US such as Verizon Wireless, have not paced any restrictions on the services offered by Skype, but have infact offered the software on some of its handsets since the past year. However, on the other hand, British operator Vodafone Group Plc requires users to pay an additional charge of $ 23 each month to gain access to Web-based calls on their mobile phone. Further, reports suggest that France Telecom and Deutsche Telekom in UK have banned access to such services.
Sources claim that operators impose such restriction in an attempt to safeguard their profits as well as counter the fall in revenues from traditional voice and message services.
Everything Everywhere announces new bank financing facilities worth $ 1.35 billion (UK)
UK’s mobile operator, Everything Everywhere has reportedly announced new bank financing facilities worth $ 1.35 billion, in the next step towards becoming an independent entity. According to reports, the operator will use the facilities to refinance a part of the loan received by parent companies France Telecom and Deutsche Telekom worth $ 1.93 billion.
As per sources, Neal Milsom, CFO, Everything Everywhere, has said that they are pleased to receive the support of the high quality lenders who are participating in their new bank financing facilities. The participating banks include Bank of Tokyo-Mitsubishi, Barclays Capital, HSBC, J.P. Morgan, Lloyds Bank, Morgan Stanley and Royal Bank of Scotland.
Reports suggest that Everything Everywhere claims that the there will be no change in its ownership structure after the refinancing, and that it will continue to be a 50:50 joint venture between France Telecom and Deutsche Telekom.
AT&T to record a cost of US$ 4 billion in the 4Q if T-Mobile merger fails (USA)
US mobile operators AT&T and T-Mobile have reportedly withdrawn their petition from the Federal Communications Commission (FCC) in an attempt to first win approval for the clearance of the deal from the Justice Department. Further, according to reports AT&T will record a charge of US$ 4 billion in the fourth quarter as pretax accounting costs to be paid to Deutsche Telekom as breakup fees in the event that the merger is not permitted to go through.
Sources claim that this move reveals that this move is AT&T’s way of taking charge for the cost in the likelihood of the merger failing. As per sources, AT&T has said that the $4 billion accounting charge includes $3 billion in cash and $1 billion in book value of wireless spectrum.
Company reports suggest that AT&T has said that both the operators are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice.
Congstar launches new smartphones with internet flat rate bundles (Germany)
Congstar, a subsidiary of Deutsche Telekom has reportedly launched a number of smartphones bundled with an internet flat-rate, enabling users to save upto 25 percent in comparison to the price paid when the service is availed separately. As per sources, the operator offers users five plans to choose from in combination with their preferred Congstar plan.
According to reports, the operator has revealed that the contract term for all the sparpaket plans is two years. Further, Stephan Heininger, Marketing Director, Congstar has reportedly said that they have launched the five offers to suit the varying needs of all their customers, across different budget segments ranging from the Samsung Galaxy to the Samsung Galaxy SII.
As per company reports, the offers include the Samsung Galaxy Mini at a deposit of US$ 40 along with US$ 13 per month, along with the HTC Wildfire 3 at a deposit of US$ 40 and US$ 20 per month. Other bundles include the Sony Ericsson Xperia Active with a deposit of US$ 13 and a payment of US$ 24 per month, the Sony Ericsson Xperia Ray with a deposit of US$ 81 and US$ 24 per month as well as the Samsung Galaxy S II with a deposit of US$ 135 and a charge of US$ 34 per month.
T-Mobile saves up US$ 64 million cash for top management in anticipation of AT&T merger (USA)
U.S. based mobile operator T-Mobile, a unit of Deutsche Telekom, has reportedly been setting aside cash in an effort to retain its top management if the deal with AT&T is permitted to go through by the US government. According to reports, the network operator has already accumulated $64 million in merger-related employee costs for the past two quarters.
As per sources, AT&T originally hoped to finalize the deal by March 2012, however it recently delayed the date after the U.S. government intervened to block the merger citing unfair competition. As reported earlier by Wireless Federation, The Department of Justice has reportedly stated that the proposed $39 billion transaction would substantially lessen competition for mobile wireless telecommunication services across the United States, resulting in higher prices, poor quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives.
