MetroPCS’s Carter Says AT&T’s Acquisition of T-Mobile USA Likely to Fail

By Scott Moritz - Dec 7, 2011 4:21 AM GMT+0700

MetroPCS Communications Inc. (PCS) Chief Financial Officer J. Braxton Carter said AT&T Inc.’s attempt to buy T-Mobile USA is likely to fail, signaling lack of confidence by a company AT&T had approached to help with the transaction.

Carter made the comments at a UBS AG event in New York today. AT&T, seeking regulatory approval for the deal, has been in discussions with MetroPCS to sell spectrum and customers as a way of propping up competition in the absence of T-Mobile, people familiar with the matter said last month.

Discussing any scenarios to save the $39 billion deal is “almost kind of moot at this point given the intense opposition by the government,” Carter said. Companies involved need to move on to “plan B,” he said.

The comments suggest the odds of AT&T completing the T- Mobile takeover may be decreasing and that AT&T may need to find another partner to buy some assets as part of the transaction. The carrier has also been in talks with Leap Wireless International Inc. (LEAP), the people close to the situation have said.

Brad Burns, a spokesman for AT&T, didn’t immediately return a call seeking comment.

AT&T, based in Dallas, wants to work out an agreement with the Justice Department, which sued on Aug. 31 to block the deal. If the two sides can’t reach a compromise, they’re scheduled to go to trial in February.

AT&T rose (T) 0.1 percent at $29.17 at the close in New York. Deutsche Telekom AG (DTE), owner of T-Mobile USA, fell 0.5 percent to 9.15 euros in Frankfurt. MetroPCS climbed 7.8 percent to $9, making it the biggest gainer in the S&P 500 index.

Carter said MetroPCS is experiencing “very significant” improvement in fourth-quarter churn, or customer defections, and that demand for the Richardson, Texas-based company’s $40-a- month prepaid plans is strong.

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net