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T-Mobile's $3B Cash Break Up Fee from AT&T will Save it for a While

T-Mobile is set for the next year

Dec 20 2011, 2:35pm CST | by

T-Mobile's $3B Cash Break Up Fee from AT&T will Save it for a While
 
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We mentioned this morning that AT&T decided to pull out of the proposed purchase of T-Mobile and has been forced to cough up $4 billion in cash and wireless spectrum for backing out. T-mobile parent company Dutsche Telekom has announced that the massive $3 billion cash payment for backing out of the deal will hold T-Mobile over for a while.

Estimates say that the $3 billion will cover the expenses for T-Mobile for the next 12 to 24 months before T-Mobile needs to look again for a new partner. Analysts Wolfgang Specht says that if the funds run out before T-Mobile has a partner in place it will not have enough cash flow to cover capital spending.

The deal fell through once it became apparent that the sell of of T-Mobile assets wasn’t enough to satisfy US regulators. AT&T and T-Mobile merged would have made AT&T the largest of the carriers in the US. T-Mobile isn't doing well though and has lost 849,000 contract customers in the last nine months.

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<a href="/latest_stories/all/all/3" rel="author">Shane McGlaun</a>
Leading our review center, Shane McGlaun (Google) knows technology inside out. His extensive experience in testing computer hardware and consumer electronics enable him to effectively qualify new products and trends. If you want us review your product, please contact Shane.
Shane can be contacted directly at shane@i4u.com.

 

 

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