AT&T Makes Case For T-Mobile Deal

Randall-L.-Stephenson

AT&T executives believe the carrier's planned $39 billion acquisition of T-Mobile will be approved by federal regulators  -- and provide big benefits to consumers. At a press conference this morning, AT&T CEO Randall Stephenson reiterated that the deal would improve network quality, give customers access to a wider variety of services and expand its 4G LTE service across the U.S. to 95% of the population.

(AT&T's LTE rollout schedule will not change.) By expanding mobile broadband capacity, he also said the merger would help meet exploding demand for data use and fulfill the FCC's broadband goals.

AT&T pointed out that prepaid services, such as MetroPCS and Leap Wireless, are providing competition -- with many large cities having five or more carrier choices. Stephenson acknowledges that the company will have to make divestitures, but expressed confidence that "we can agree on something that's good for both sides."

Ralph de la Vega, who heads AT&T Mobility, added that the deal will give T-Mobile customers access to AT&T's Wi-Fi hotspot network, as well as reduce churn, improve margins and help the companies deliver services to a wide range of connected devices.

However, Rep. Edward J. Markey (D-Mass.) issued a statement Monday calling for congressional hearings to evaluate whether an AT&T-T-Mobile merger would be in the public interest. 

Rick Lindner, AT&T's CFO, summarized financial aspects of the acquisition, including 64% of the purchase being financed in cash and T-Mobile receiving 8% of AT&T stock. It will also increase AT&T's total wireless revenues from $58.5 billion to nearly $80 billion and boost the percentage of AT&T's total revenues from wireless to about 80%.

Still, the deal faces regulatory hurdles. Consumer advocates have already weighed in against the merger, and the FCC warned in a report last year that the wireless industry had become more concentrated, with AT&T and Verizon between them accounting for 60% of customers.

Tags: m&a, mobile, telecom
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