AT&T 'Certainly' Won't Oppose T-Mobile & Sprint's Merger

AT&T has no plans to oppose T-Mobile and Sprint's proposed merger valued at $26.5 billion, according to John Donovan, the Chief Executive Officer of the company's Communications unit. While speaking at this week's MoffettNathanson Media & Communications Summit, Mr. Donovan reflected on the current state of the industry as highly varied, having observed how every one of AT&T's rivals has "a very different strategy." On the subject of the consolidation that would put T-Mobile and Sprint within a striking distance of AT&T in terms of subscribers, the executive concluded the telecom giant "certainly won't contest it."

AT&T attempted acquiring T-Mobile in 2011 but saw its move blocked by stateside regulators, with the development forcing it to pay a $4 billion breakup fee to its smaller rival and that penalty including $1 billion worth of spectrum. The episode marked the start of a turnaround for T-Mobile that ended up hiring John Legere as its CEO shortly afterward and made a major comeback, surpassing Sprint in terms of subscribers three years later. AT&T has now dropped the idea of pursuing a horizontal merger but is instead attempting to wrap up an even more lucrative tie-up with Time Warner which would set it back $85.6 billion. Despite the fact that vertical mergers historically faced little opposition from Washington, AT&T is presently leading a legal battle against the Department of Justice that ended up suing to block the deal, claiming the consolidation would grant the company too much power in the media distribution industry given how it already owns DIRECTV and could be tempted to raise the licensing costs of Time Warner's content for its rivals.

AT&T repeatedly dismissed that notion as not grounded in reality, claiming it wouldn't make any moves that could risk devaluing Time Warner's intellectual properties which range from Batman to Game of Thrones. T-Mobile and Sprint are claiming their tie-up will create more competition than it takes out, especially in the 5G segment, though skepticism about that concept is already circulating the industry. The duo is presently hoping to convince U.S. regulators to approve the deal by the end of the first half of 2019.

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Dominik Bosnjak

Senior Writer
Dominik started at AndroidHeadlines in 2016. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]