AT&T deal ironies may play for more than laughs
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
AT&T unleashed a torrent of ironies with its $39 billion deal for T-Mobile USA. The rhetorical backpedaling will play for plenty of laughs but also may be fodder for critics.
Consider some widely run ads by Verizon Wireless that tried to showcase its better rural coverage. AT&T, which always bristled at claims its network couldn’t compete in less populated areas, sued to stop its rival from running them. Now, AT&T is featuring the same maps from the Verizon campaign to sell its T-Mobile takeover to regulators.
Other firms may wish they had been more circumspect. Sprint liked to talk about how it was the first to offer super-fast 4G phones. The No. 3 cellular service provider, which now faces being left behind by further industry consolidation, has asked regulators to take a hard look at the deal. Sprint might find it tougher to claim that access to the most advanced handsets is any sort of handicap.
Small-fry competitors such as MetroPCS and Leap Wireless would have their own problems should they come out against the deal. They have bragged about how their size makes them more nimble than larger rivals and how they could offer customers better pricing than other carriers. Surely, it will be easier to run circles around an even more bloated AT&T?
T-Mobile has its own amusing retreat on its hands. Parent company Deutsche Telekom says the deal is the best “solution” for its customers. It might be hard for customers to believe, given T-Mobile’s recent TV ads rubbishing AT&T’s network for its slow speed.
The deal has made for other strange bedfellows. AFL-CIO President Richard Trumka said the purchase of non-union T-Mobile by the unionized AT&T would be good for U.S. telecom workers. Yet AT&T promises $3 billion of annualized synergies from the deal, which will involve a significant number of job cuts.
Much of the bombast may be easily forgotten amusement. But given the amount of scrutiny the deal will receive, those in the industry both for and against the deal may find themselves haunted by their own past words.