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AT&T CEO: Sprint/T-Mo have a ‘tough hill to climb’ on merger

AT&T fighting DoJ over Time Warner acquisition

Executives from Sprint and T-Mobile US have been hitting the Hill hard seeking to gain consensus for a proposed merger that, if approved, would reduce the U.S. Tier 1 mobile operator market from four to three players. Speaking at the Code Conference in California last week, AT&T CEO Randall Stephenson, in comments reported by CNBC, said the two companies would have “a tough hill to climb” in terms of regulatory approval.

AT&T is currently fighting the Department of Justice regarding its bid to acquire Time Warner and its massive video content holdings and distribution.

Despite precedent to the contrary, DoJ and President Trump have long signaled opposition to the vertical merger. Speaking to the T-Mo/Sprint tie up, Stephenson said, “It’s a classic horizontal merger where they are taking a competitor out of the marketplace. Power to them if they get it done.”

Asked Friday by Reuters about the deal, Makan Delrahim, of DoJ’s antitrust division, commented on the potential anti-competitive reduction in domestic wireless carriers, something the Obama administration was against. “I don’t think there’s any magical number that I’m smart enough to glean,” he said.

Stephenson didn’t give an up or down answer on whether he thinks the deal with pass regulatory muster. “People will say, ‘Well if he comes out and says he supports it, that means it must be anti-competitive because why would he want it? But if he comes out and says he’s against it, that must mean it’s pro-competitive, so we ought to let it go.'”

Last month at the MoffettNathanson Media and Communications Summit, T-Mobile US CTO Neville Ray and CFO Braxton Carter talked up how a combination of the companies would serve to further domestic 5G leadership, something that has peaked the interest of federal lawmakers in recent months resulting in a presidential order to block Broacomm’s hostile takeover bid of Qualcomm, for instance.

In dissecting the various synergies associated with the Sprint/T-Mo tie up, Ray called 5G a “really important dimension.” Noting accelerating 5G launch plans in the U.S. and APAC region, Ray said, “We’ve all seen some of those concerned very vocally placed into the market and into the media. There’s a real concern the U.S. will get left behind in the race to 5G capabilities.” He ticked off U.S. companies like Google, Facebook, Uber and Amazon that have dominated the internet economy.

To his interaction with lawmakers in Washington D.C., Ray said, “We’ve gone around D.C. and talked to the regulators, the folks on the Hill, FCC, DoJ; we are being with open doors, open minds, which is super important.”

 

 

 

ABOUT AUTHOR

Sean Kinney, Editor in Chief
Sean Kinney, Editor in Chief
Sean focuses on multiple subject areas including 5G, Open RAN, hybrid cloud, edge computing, and Industry 4.0. He also hosts Arden Media's podcast Will 5G Change the World? Prior to his work at RCR, Sean studied journalism and literature at the University of Mississippi then spent six years based in Key West, Florida, working as a reporter for the Miami Herald Media Company. He currently lives in Fayetteville, Arkansas.