German parent company Deutsche Telekom has outlined T-Mobile USA’s future strategy in its 2011 annual report, promising to launch Long Term Evolution (LTE) services in 2013 using USD1 billion worth of re-farmed frequencies that it received as part of the failure of its controversial USD39 billion merger with AT&T last year. AT&T is obliged to hand over the spectrum – along with USD3 billion in cash – after pulling out of the deal as opposition mounted from the Federal Communications Commission (FCC), the Department of Justice (DoJ), a number of attorneys general and rival wireless carriers. At the time, Tom Sugrue, T-Mobile’s senior vice president for government affairs, commented: ‘This additional spectrum will help meet the growing demand for wireless broadband services. We hope the FCC will move swiftly to approve the licence assignments’. As a result of the deal’s breakup, T-Mobile will receive – pending regulatory approval – a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including twelve of the so-called ‘Top 20’ markets.
In other news, this week AT&T confirmed that CEO Randall Stephenson received a USD2.08 million pay cut in 2011 for failing to successfully complete the T-Mobile acquisition. According to a federal filing, Stephenson’s total pay – including stock – was USD22 million, a 19% decline on the USD27.3 million he received in 2010. AT&T indicated that all of its ‘named officers’ took a pay cut of 75% to 80% of their bonuses as a direct result of the deal’s collapse. Washington-based AT&T spokeswoman McCall Butler commented: ‘AT&T is committed to paying for performance and the compensation reflects that’. However, two executives, Ralph de la Vega, CEO of AT&T Mobility, and John Stankey, AT&T’s chief strategy officer both received 100% of their scheduled bonuses.