T-Mobile US Gets Big Payday If AT&Tmo Deal Doesn't Go Through

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Today in both the tech and financial worlds, the big story was the announcement that AT&T plans to spend $39 billion on acquiring T-Mobile US from Deutsche Telekom, the German phone company. There is already talk about the US government stopping the deal, and if the deal doesn’t go through – that means no skin off AT&T’s back – right? Wrong. Like most of these big acquisition deals, the terms between AT&T and T-Mobile US have AT&T paying T-Mobile $3 billion and giving up wireless spectrum if the deal doesn’t go through.

Such breakup fees aren’t uncommon in the world of mergers and acquisitions. The Google-AdMob deal from last year saw AdMob getting $700 million if the deal didn’t go through. The San Francisco Chronicle reports that Google’s breakup fee in the Google-DoubleClick deal was $3.1 billion – almost the same as the price that Google was paying for DoubleClick.

In addition to the $3 billion in cash that T-Mobile would get, AT&T would also give some AWS spectrum to T-Mobile that they hold. T-Mobile uses the AWS waves for their 3G in the United States, and AT&T is planning to use AWS for their LTE buildout. In fact, AT&T is buying T-Mobile for the spectrum, so in the event the deal doesn’t go through, I guess they feel they could part with their AWS holdings. The “breakup fee” also mandates that AT&T and T-Mobile would sign a roaming agreement that would be favorable to both companies.

Some tech blog commentators are already suggesting that T-Mobile might be better off if the deal is blocked by US regulators. Considering that AT&T is the big bad super carrier and T-Mobile is seen as this little indie carrier – it seems that a lot of folks are rooting for the deal not to go through. And Sprint, who is currently the #3 carrier in the country and would become the smallest “major” carrier if the AT&Tmo deal goes through, also issued a statement that strongly discouraged the deal.

Regardless, AT&T seems extremely confident that the deal will go through. They’ve already begun courting the Washington DC crowd and trying to prove that there’s enough competition in the US wireless industry and a combined AT&T-T-Mobile would be okay for the country’s consumers.