AT&T Inc's $39 billion purchase of T-Mobile USA from Deutesche Telekom of Germany, its biggest acquisition worldwide in almost a year, is likely to take a year to gain approval even if the carrier pledges to sell assets and expand rural coverage.
The two mobile companies unveiled the plan last night and according to analysts, the move which would bring together the second and third largest mobile operators is likely to be seen as directly challenging the stance of competition authorities who have already expressed concern that consumers may not always be getting a fair deal.
The telecoms regulator the Federal Communications Commission, (FCC) had last May warned against growing concentration among mobile providers.
With the acquisition AT&T would overtake Verizon Wireless its largest rival, to emerge as the biggest US mobile-phone carrier. Between them AT&T and T-Mobile hold a 39 per cent share of the market, according to research firm EMarketer Inc.
Meanwhile, the concerns of consumer groups and the US FCC are that the deal would reduce competition and consumer choices, which would in turn push up prices. AT&T expects it would be required to divest wireless spectrum and subscribers as a condition for approval, according to sources.
According to two people with knowledge of the matter, a failure to conclude the deal would mean AT&T may need to pay a breakup fee of $3 billion and some spectrum.