Tens of thousands of jobs could be at stake now that AT&T’s (T) proposed $39 billion acquisition of T-Mobile appears poised to collapse, according to a report published earlier this month by The Communication Workers of America. The union is not usually an advocate of mega-mergers, but it says this one is different. AT&T Mobility has promised the union that jobs will be protected, and it has said that if the merger goes through it will be followed by $8 blllion in capital expenditures to build out and deploy an LTE network. CWA says these expenditures will create up to 96,000 new jobs at tower companies, network infrastructure providers and software firms that develop applications.
CWA used research from the Economic Policy Institute (EPI) to derive its estimate. According to EPI, each $1 billion in capital expenditure on wireless infrastructure can create up to 12,000 new jobs a year as a result of network expansion.
Before withdrawing its merger application from the Federal Communications Commission, AT&T told the agency “T-Mobile USA non-management employees whose job functions are no longer required because of the merger will be offered another position in the combined company.” CWA believes that T-Mobile USA employees have a brighter future with AT&T than they will have if T-Mobile USA continues to be owned by Deutsche Telekom. The German company has said that it does not plan to invest further in T-Mobile USA’s network, and the carrier has already started losing customers.
If AT&T does not acquire T-Mobile USA, some analysts expect that it may focus its capital expenditures on spectrum acquisition rather than network build-out. It will also owe a hefty breakup fee to DT. Last week, AT&T said it will take a $4 billion charge in the fourth quarter in anticipation of the $6 billion breakup fee it will owe Deutsche Telekom if the deal falls apart.
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