AT&T hopes Leap deal will enable T-Mobile buy: report
The carrier hopes to ease regulatory objections to its T-Mobile acquisition by selling assets to a second-tier wireless operator, the New York Times says.
- Shankland covered the tech industry for more than 25 years and was a science writer for five years before that. He has deep expertise in microprocessors, digital photography, computer hardware and software, internet standards, web technology, and more.
AT&T's foundering bid to acquire T-Mobile could hinge on a last-minute deal with a second-tier wireless operator, Leap Wireless, to try to allay regulators' antitrust concerns.
That's according to a New York Times report last night, which said AT&T is "knee deep" in talks that would mean both T-Mobile customers and wireless spectrum would be sold to Leap.
Leap is one of a handful of players that might be interested in T-Mobile assets, my colleague Maggie Reardon reports in her FAQ about AT&T's troubles trying to buy T-Mobile. Leap could potentially be picking up T-Mobile assets even if not through an AT&T deal, given that T-Mobile's parent company Deutsche Telekom apparently isn't so interested in staying in the U.S. market anymore.
U.S. antitrust regulators at the Justice Department and the Federal Communications Commission both have raised concerns about AT&T's attempt to buy T-Mobile. Selling off some T-Mo assets, which could help raise Leap's national stature, is an attempt to dilute the concentration of power that AT&T would would otherwise obtain through the acquisition. AT&T would keep some of the T-Mobile wireless spectrum--radio-frequency bands needed for networking--that was at the heart of the acquisition deal.
Leap Wireless, which sells services under the Cricket Wireless brand, is in the "prepaid" market. That means customers pay for service as they need it, without the two-year subscriptions typical with the large carriers and higher-end smartphones.