AT&T CEO Makes Case T-Mobile Deal Will Boost IPhone Service
March 30, 2011, 4:11 PM EDTBy Greg Bensinger
(Updates share price in final paragraph.)
March 30 (Bloomberg) -- AT&T Inc. Chief Executive Officer Randall Stephenson, making his case for a proposed takeover of T-Mobile USA, said the deal would boost network capacity and improve service for devices such as Apple Inc.’s iPhone.
The acquisition would improve capacity on AT&T’s wireless network by about 30 percent in some of the largest U.S. cities, Stephenson said today at an event at the Council on Foreign Relations in New York. It could also reduce charges for overseas roaming, he said.
“This transaction is very instrumental” in improving network service, said Stephenson at the event. “Virtually on the day you close the deal, getting a 30 percent lift in capacity in New York City: that’s a significant improvement in call quality and data throughput.”
AT&T said on March 20 it had agreed to buy T-Mobile USA from Deutsche Telekom AG, in a deal that would combine the second- and fourth-largest U.S. wireless operators to create the country’s largest. The acquisition, which would leave three major national wireless players including Verizon Wireless and Sprint Nextel Corp., is subject to regulatory approval.
AT&T said that as part of the purchase it would expand the rollout of its high-speed wireless technology, helping achieve the U.S. Federal Communications Commission goal of making broadband available more widely. AT&T will offer its Long-Term Evolution, or LTE, technology to an additional 46.5 million people as part of the deal.
Concerns Unfounded
Stephenson said concerns about the merger limiting competition in the U.S. are unfounded.
“This is an intensely competitive industry,” he said. “It is intense before we do this transaction, it will be intense after we do this transaction.”
Sprint, the third-largest U.S. wireless provider, said March 28 it would seek to have the deal blocked by U.S. agencies. The transaction is anticompetitive and would result in an industry dominated by two carriers, the company said.
AT&T added 66 cents, or 2.2 percent, to $30.71 at 4 p.m. in New York Stock exchange composite trading. The shares have gained 4.5 percent this year.
--Editors: Peter Elstrom, Ville Heiskanen
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
