Earlier this week, the US wireless carrier AT&T announced it's acquiring Time Warner for more than $85 billion. The move came as a bit of a surprise but it definitely makes sense considering the increasingly saturated mobile market in the US which led wireless carriers to look for alternative revenue streams. Merging a major wireless, broadband, and pay-TV provider such as AT&T with an enormous media and entertainment conglomerate like Time Warner, can certainly lead to new business opportunities. To put that in simpler terms, a content distributor purchased a content maker in order to diversify its portfolio and likely join their services together. In the long-term, that move will probably pay off.
Now, the US government has yet to approve this deal taking place but as AT&T argues that Time Warner isn't its direct competitor and describes this as a vertical merger, it's more likely that the purchase gets approved than not. After all, AT&T also managed to convince the Federal Communications Commission and the US Department of Justice to approve its acquisition of DIRECTV last year. So, provided this actually ends up happening, AT&T's competitors certainly won't be too happy because the second largest US wireless carrier will soon start offering an even more diversified lineup of products and services and potentially take over some additional market share.
That's basically why the merger of AT&T and Time Warner could easily prompt more major acquisitions in the US as other content providers and distributors will be looking for an edge to compete with the upcoming conglomerate. As Reuters reports, many see T-Mobile as that competitive edge. The third largest wireless carrier in the country has been doing rather well in recent years and even managed to overtake Sprint. Industry experts claim that Dish, Comcast, and America Movil are some of the most likely suitors while Reuters cites T-Mobile's COO Mike Sievert who just asserted that the wireless carrier is "very interested" in exploring new strategic opportunities, hinting at a potential merger with some content suppliers.
In other words, if approved, AT&T's acquisition of Time Warner could easily set a precedent for this type of merger which means that a new era of the so-called quad-play services may be on the horizon in the US. That would consequently have major implications when it comes to regulating zero-rating practices in the country. Whether AT&T's latest acquisition actually prompts someone to purchase T-Mobile remains to be seen, but one thing is certain – the US government could soon instigate major industry changes if it ends up approving the merger of AT&T and Time Warner.