At a press conference this morning, AT&T executives highlighted reasons why they believe the carrier's planned
$39 billion acquisition of T-Mobile will be approved by federal regulators
and how it benefits consumers. AT&T CEO Randall Stephenson reiterated the deal would improve network quality, give customers access to a wider variety of services and will 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 as well as 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 the company will have to make divestitures, but expressed confidence that "we can agree on something that's good for both sides." AT&T
Mobility head Ralph de la Vega 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.
Rick Linder, 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%. Nevertheless, 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.