AT&T, Deutsche Telekom withdraw application to FCC

AT&T, Deutsche Telekom withdraw application to FCCUS telecom giant, AT&T and T-Mobile’s parent firm, Deutsche Telekom has announced that they have withdrawn an application with the Federal Communications Commission linked to the proposed merger of their cellular operations.

AT&T also announced that it will take a $4 billion charge against earnings, which is a breakup fees that is owned to the Deutsche Telekom. The two companies said that the planned $39 billion purchase of T-Mobile USA looks highly doubtful due to several challenges.

They said that the withdrawal is a tactical move after the commission chairman said that he would move to oppose the deal. The Justice Department had already filed an antitrust suit to oppose the merger.

The two firms said that they will now focus on the antitrust trial and expressed their commitment to continue to work on the proposed merger. Analysts say that AT&T might also decide to sell more than 40 per cent of T-Mobile’s assets to rival firms in order toe address the concerns of the Justice Department and F. C. C.

AT&T has faced a severe capacity crunch and the merger is seen as an answer to address capacity shortfall. If the company is able to acquire the forth largest telecom company in the market, it could quickly build out high-speed, next-generation network capacity to improve its service.