Wireless nightmares: AT&T/T-Mobile falls apart at trial

(Editor's Note: The below is simply a possible outcome--one of many. It is intended as a lighthearted look at a possible executive nightmare. Meaning, this is not real.)

Deutsche Telekom CEO Rene Obermann:
AT&T/T-Mobile falls apart at trial

Rene Obermann

Rene Obermann

Rene Obermann and Deutsche Telekom have more to lose if the Department of Justice's lawsuit to block AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA. Deutsche Telekom hopes to use the cash from the deal to refocus on its core European operations and pay off around $18.2 billion in debt. If the merger transaction does fall apart, AT&T will be required to pay T-Mobile parent Deutsche Telekom a $6 billion breakup fee, which includes $3 billion in cash and $3 billion in spectrum and roaming agreements.

While significant, it's a small consolation. On a more strategic level, being denied the ability to latch on AT&T's spectrum and its path to LTE will leave T-Mobile in a precarious position for 4G. Deutsche Telekom could theoretically use the breakup fee to bolster T-Mobile's entire network once it gained control of those assets, which could take time given the potential legal challenges involved. The company might also enter into some kind of network-sharing deal with AT&T. Clearwire (NASDAQ:CLWR), which has an abundance of spectrum, and which T-Mobile held negotiations with last year, intends to deploy a TDD-LTE network if it can get an additional $600 million in financing. However, that's not a clear-cut option either. Moreover, what will become of T-Mobile's brand, which has been trending more toward prepaid? It all adds up to a nightmare for Obermann. 

        

Wireless nightmares: AT&T/T-Mobile falls apart at trial
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