How much did T-Mobile US make from that failed AT&T buyout? How about $7.7bn

Stop grumbling about the auction, John. You cleaned up

A failed 2011 merger with AT&T is paying off in a big way for T-Mobile US.

Analysts at New Street Research (via The Wall Street Journal) estimate that a $1bn spectrum package T-Mobile US received in the wake of the ill-fated acquisition has ballooned in value to $4.7bn.

The frequencies were part of a $4bn breakup package AT&T offered T-Mobile US when they agreed to the $39bn merger. When it became clear that the takeover would not get approval from regulators, AT&T withdrew its offer and paid out $3bn in cash and $1bn in mid-band spectrum rights.

Though a minor part of the original package, the spectrum has exploded in value thanks to the FCC mid-band auction.

Based on the prices paid at the auction, New Street Research estimates that the $1bn package is now worth $4.7bn, lifting the value of the total compensation to $7.7bn.

The auction credited for bringing the $3.7bn boost to T-Mobile US was also trashed by CEO John Legere, who argued that lax bidding rules allowed AT&T, Dish and Verizon to snatch up a disproportionate amount of the offered spectrum. Legere did have a point: the top three winners in the auction got 94 per cent of the offered spectrum rights.

Perhaps the few billion dollars of value his company picked up in the process will help subdue the anger. ®

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