AT&T to Argue Efficiency of T-Mobile Deal, Remains Confident of Resolution, CEO Says
Efficiencies will be the core of the T-Mobile transaction debate in court, AT&T CEO Randall Stephenson said during a Goldman Sachs investor conference Thursday. AT&T is confident that a resolution will be reached on the Department of Justice’s complaint and it will complete the transaction, he said.
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AT&T’s premise for proposing the deal has been efficiency improvements, Stephenson said: Efficiencies are critical to keeping wireless service prices intact. Efficiency arguments have been used extensively by DOJ in reviewing transactions for a long time, Stephenson said. The deal will result in capacity increases of 30 to 35 percent in some markets if AT&T and T-Mobile’s spectrum and network assets are combined, he said. While AT&T will be preparing aggressively to litigate the transaction and the related complaints, it hopes to reach a solution that could address all of DOJ’s concerns, Stephenson said. The benefits of the deal are unchanged, he said: T-Mobile is “a diminishing asset and we need to move things along.”
On the economy, “2012 won’t look a lot different to what we've seen for 2011,” Stephenson said, citing little activity in the low end of the consumer market and the business market. Meanwhile, the company’s not worried about its competitors potentially getting the iPhone. The effect of new carriers adding the devices is always “overblown,” Stephenson said. The competitive dynamic would be no different than before, he said.
The company is looking to combine LTE with cloud services over the next few years, Stephenson said. The combination of LTE and cloud services represents a “more dynamic” environment than the last few years have been in wireless, he said. That means higher demand for bandwidth, requiring more-efficient wireless backhaul, he said. As carriers move to LTE, pricing over time would move away from a voice-centric model to a data-centric model, he said. Customers will be making purchasing decisions around the data bundle instead of a voice or text-messaging bundle, he said.