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 »
Just after President Obama finished his address to the DNC, Hillary Clinton walked out on stage to join him, so the better could share a few embraces, wave to the crowd—and let the cameras capture all the unity for posterity.
In a speech that began a bit like a State of the Union address, President Obama said the "country is stronger and more prosperous than it was" when he took office eight years ago. He then talked of battling Hillary Clinton for the nomination in 2008, and discovering her "unbelievable work ethic," before saying that no one—"not me, not Bill"—has ever been more qualified to be president. When his first mention of Donald Trump drew boos, he quickly admonished the crowd: "Don't boo. Vote." He then added that Trump is "not really a plans guy. Not really a facts guy, either."
Tim Kaine introduced himself to the nation tonight, devoting roughly the first half of his speech to his own story (peppered with a little of his fluent Spanish) before pivoting to Hillary Clinton—and her opponent. "Hillary Clinton has a passion for children and families," he said. "Donald Trump has a passion, too: himself." His most personal line came after noting that his son Nat just deployed with his Marine battalion. "I trust Hillary Clinton with our son's life," he said.
Michael Bloomberg said he wasn't appearing to endorse any party or agenda. He was merely there to support Hillary Clinton. "I don't believe that either party has a monopoly on good ideas or strong leadership," he said, before enumerating how he disagreed with both the GOP and his audience in Philadelphia. "Too many Republicans wrongly blame immigrants for our problems, and they stand in the way of action on climate change and gun violence," he said. "Meanwhile, many Democrats wrongly blame the private sector for our problems, and they stand in the way of action on education reform and deficit reduction." Calling Donald Trump a "dangerous demagogue," he said, "I'm a New Yorker, and a know a con when I see one."
Vice President Biden tonight called President Obama "one of the finest presidents we have ever had" before launching into a passionate defense of Hillary Clinton. "Everybody knows she's smart. Everybody knows she's tough. But I know what she's passionate about," he said. "There's only one person in this race who will help you. ... It's not just who she is; it's her life story." But he paused to train some fire on her opponent "That's not Donald Trump's story," he said. "His cynicism is unbounded. ... No major party nominee in the history of this country has ever known less."