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Abstract

The case is tailored for imparting business learning to undergraduates and can be used for examination purpose. The case revolves around a business situation of an unsuccessful merger between AT&T and T-Mobile USA in the US wireless telecom industry. AT&T, the no 1 player based on market share in the US wireless service industry had planned to acquire T-Mobile USA for $39 billion in cash cum stock deal. The T-Mobile USA operated as a part of Deutsche Telekom and ranked no 4 in terms of market share in the US wireless service industry. Through the proposed deal, AT&T envisaged potential advantages in terms of improved services, direct and indirect job creation, enhanced LTE coverage, and investment in the infrastructure and rural communities in the US. But, AT&T was jolted when the Federal Communications Committee (FCC), an agency of the US government, rejected the proposed deal between AT&T and T-Mobile USA on the ground that it was not in public interest. The FCC opined that the proposed deal might lead to higher prices, fewer choices and lower quality products for mobile wireless service consumers in the US. The case attempts to discuss how a merger or acquisition between dominant industry players could alter the industry dynamics along with highlighting the government's role as a key shaper of the industry.
Location:
Industry:
Other setting(s):
2011

About

Abstract

The case is tailored for imparting business learning to undergraduates and can be used for examination purpose. The case revolves around a business situation of an unsuccessful merger between AT&T and T-Mobile USA in the US wireless telecom industry. AT&T, the no 1 player based on market share in the US wireless service industry had planned to acquire T-Mobile USA for $39 billion in cash cum stock deal. The T-Mobile USA operated as a part of Deutsche Telekom and ranked no 4 in terms of market share in the US wireless service industry. Through the proposed deal, AT&T envisaged potential advantages in terms of improved services, direct and indirect job creation, enhanced LTE coverage, and investment in the infrastructure and rural communities in the US. But, AT&T was jolted when the Federal Communications Committee (FCC), an agency of the US government, rejected the proposed deal between AT&T and T-Mobile USA on the ground that it was not in public interest. The FCC opined that the proposed deal might lead to higher prices, fewer choices and lower quality products for mobile wireless service consumers in the US. The case attempts to discuss how a merger or acquisition between dominant industry players could alter the industry dynamics along with highlighting the government's role as a key shaper of the industry.

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Location:
Industry:
Other setting(s):
2011

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