AT&T’s chief thinks a push for a Sprint/T-Mobile merger would meet the same fate as AT&T’s own failed bid for the “mobile maverick.”
Even though the merger hasn’t been officially proposed yet, AT&T Chairman and CEO Randall Stephenson said Tuesday it is a “stretch” to see how it would get regulators’ nod of approval, because it would reduce competition in the wireless industry from four major carriers to three.
He’s not just bitter about AT&T’s expensive breakup with T-Mobile after regulators blocked its $39 billion deal in 2011. According to Stephenson, regulators made their reasons for blocking the AT&T/T-Mobile in 2011 crystal clear: The merger would reduce competition.
“There were not other major issues. That was the issue, and that’s what they came after,” he said during an interview with David Rubenstein, CEO of the Carlyle Group, for an event hosted by the Business Roundtable. “As you think about Sprint and T-Mobile combining, I struggle to see how that is not four going to three.”
T-Mobile has arguably become more of a “mobile maverick” under the leadership of CEO John Legere, who joined the company in 2012. Legere’s aggressive price-slashing strategy has reverberated throughout the wireless market.
“[Regulators] won’t want to see that to go away,” Stephenson said.
But AT&T’s chief doesn’t necessarily think the merger shouldn’t pass.
“Obviously, if I thought they should approve ours, it would be hard for me to suggest that they shouldn’t approve that one,” he said.
Breaking up with T-Mobile cost AT&T a cool $3 billion in cash and $1 billion in spectrum, and a failed merger would also cost Sprint a pretty penny. If the Sprint/T-Mobile merger fails, Sprint is rumored to have agreed to pay T-Mobile at least a $1 billion breakup fee, according to recent reports of a tentative $32 billion merger agreement between the third- and fourth-largest mobile carriers.
“It’s a pretty good business model,” Stephenson quipped.
Although Sprint sued to block the AT&T/T-Mobile merger in 2011 because it would mean “higher prices and less innovation” for consumers, the company and its owner, the Japanese telecom Softbank, are arguing that a Sprint/T-Mobile merger is different because it would help the two smaller carriers actually compete against Verizon and AT&T.
CORRECTION: A previous version of this article misstated the amount that AT&T paid T-Mobile after their 2011 merger failed.
What We're Following See More »
"House GOP leaders on Tuesday night pitched a new strategy to avert a looming government shutdown that includes children's health funding and the delay of ObamaCare taxes. Lawmakers need to pass a short-term stopgap bill by midnight Friday, when money for the federal government runs out. The latest GOP plan would keep the government’s lights on through Feb. 16, and be coupled with a six-year extension of funding for the popular Children's Health Insurance Program (CHIP). The continuing resolution or CR would also delay ObamaCare's medical device and Cadillac taxes for two years, and the health insurance tax for one year starting in 2019."
"A key Senate negotiator and White House official on Tuesday expressed little hope for an immigration deal this week but nonetheless predicted that Congress can avoid a government shutdown." Marc Short, the White House Capitol Hill liaison, said he's optimistic about a deal on DACA overall, but not this week. Senate Majority Whip John Cornyn also said he doubts an agreement can be made before week's end.
"Homeland Security Kristjen Nielsen confirmed that President Trump used 'tough language' in an Oval Office meeting last week over immigration policy, but she said she did not hear him describe some African countries and Haiti as 'shithole countries,' as has been reported." When pressed she, also said she "didn't know" whether Norway was a predominately white country.
"Chances of a government shutdown grew Monday as Republicans concluded that they would be unable to reach a long-term spending accord by the Friday deadline. GOP leaders are now turning to a short-term funding measure in hopes of keeping agencies open while talks continue, but Democratic leaders say they are unlikely to support any deal that does not protect young illegal immigrants. Aides to key negotiators from both parties planned to meet Tuesday in an effort to rekindle budget talks, setting up a Wednesday meeting of the leaders themselves. If they cannot agree, the government would shut down at midnight Friday for the first time since 2013."
“'As a junior foreign service officer, I signed an oath to serve faithfully the president and his administration in an apolitical fashion, even when I might not agree with certain policies. My instructors made clear that if I believed I could not do that, I would be honor bound to resign. That time has come,' Feeley said, according to an excerpt of his resignation letter read to Reuters."