The failed attempt to buy mobile phone operator
T-Mobile USA cost U.S. telecommunications giant AT&T dearly: the firm
on Thursday posted losses of $6.7 billion for the fourth
quarter of 2011.
The effects of the failed purchase were made worse by losses in
the company's own pension fund and by write-offs, in a quarter that
was otherwise marked "by record sales, strong wireless network
performance and improved wireline revenue trends," AT&T said in a
statement.
AT&T had made a profit of more than $1 billion in the same
period a year earlier.
The planned purchase of Telekom subsidiary T-Mobile USA for $39
billion failed in December when antitrust authorities blocked
the deal. If it had purchased T-Mobile USA, AT&T would have become
the country's largest mobile-phone operator.
AT&T had to face reality and pay the German giant Telekom $3
billion in compensation for the failed bid. Besides, Telekom
may use the roaming network of its bigger rival, and also obtained
some precious radio frequencies.
AT&T estimated the total cost of the flop at $4 billion.
The firm had to brace its pension fund with $1 billion.
This appeared to fill all outstanding gaps for the U.S. giant,
however, and the current year looks a lot better, it said. AT&T's
revenue was up 3.6 percent during the last quarter of 2011, to $32.5
billion.
"Looking ahead, we start 2012 with the best visibility we've had
in some time, and we're well positioned to deliver solid results --
including continued revenue growth with margin expansion, solid
earnings per share growth and strong cash flow," said Randall
Stephenson, AT&T chairman and chief executive officer.
"We had a tremendous year in terms of execution, and we have
excellent momentum across our growth platforms," he said.
While investors had anticipated the effects of the T-Mobile USA
deal, they had not been expecting the other exceptional costs, and
they appeared to be disappointed with the quarterly result.
