Verizon backs AT&T in T-Mobile merger

Sep 22, 2011
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Verizon CEO Lowell McAdam has spoken out in favor of the AT&T/T-Mobile merger, describing the deal as "kind of like gravity" and arguing that, if it blocks it, the US government will need to be more active in its spectrum plans. Speaking at an investor conference this week, McAdam claimed "that match had to occur" MarketWatch reports, and warned that the involved parties "need to be very thoughtful on what the impacts would be to the overall industry if this is a way to regulate the industry without actually passing regulation."

"I have taken the position that the AT&T merger with T-Mobile was kind of like gravity. It had to occur, because you had a company with a T-Mobile that had the spectrum but didn't have the capital to build it out. AT&T needed the spectrum, they didn't have it in order to take care of their customers, and so that match had to occur" Lowell McAdam, CEO, Verizon Communications

McAdam's comments are unlikely to go down well among the deal's critics, not least the Department of Justice and seven US states who have all voiced concerns that AT&T buying T-Mobile USA would not be in the public interest. However, the chief exec argues that in fact the bigger threat is that networks fall short of spectrum to continue the 4G roll-out, leaving consumers shortchanged when it comes to getting online at high-speed.

Of course, the company's stance is undoubtedly fueled by self-interest: if AT&T's deal is blocked, that does not bode well for any plans for future acquisitions that Verizon itself might have. Meanwhile, the company says it is channeling its profits into developing its technology, either intending to buy more spectrum itself or new kit to make use of it.

"If the government wants to stop a merger like that," Lowell concludes, "they need to then step up and say, this is how we are going to get spectrum in the hands of people." That means secondary auctions, incentive options or the government opening up more spectrum, he claims. AT&T faces a February 13 2012 trial over suggestions that the T-Mobile USA acquisition raises antitrust issues.


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