AT&T CEO Stephenson defends T-Mobile deal
Fresh off of last week’s announced bid for T-Mobile, AT&T CEO Randall Stephenson sat down with Chrystia following a breakfast this morning at the Council on Foreign Relations in New York. He explained why this deal is good for his shareholders:
Over the last four years, since the mobile broadband era was introduced, the volumes on our network are up 8,000%. We’re investing an incredible amount of capital, but we look out into the future and we do not believe, that given the growth rates we expect in the future, that there is adequate spectrum in the industry to accommodate this growth. The infrastructure, the sell-side infrastructure — the build requirements — are really extensive. You do this transaction, it gives you an immediate lift of capacity in the neighborhood of about 30% in most of our major metropolitan areas. That kind of capacity lift is future growth and future opportunity to serve customers, so this good for the shareowners. The synergies associated with this from a shareowner standpoint represent in excess of $40 billion of synergies.
The AT&T chief was sanguine that the Department of Justice would ultimately bless the T-Mobile acquisition sometime next year, noting that in 18 of the top 20 mobile telecommunications markets in the U.S., consumers have a choice of at least five providers. When asked if he was prepared to offer consumer guarantees like price caps, Stephenson replied that recent history clearly shows consumer prices fall in the wake of this type of big merger.
Moreover, Stephenson said the growth of wireless broadband telecommunications has had a profound effect on U.S. productivity, especially via the acceleration of commercial transactions and via capital investment. AT&T spends more on capital investment than any other publicly traded U.S. company, he said. The firm plans to invest $19 billion domestically this year.
Head to CFR.org to watch the video from full event.
Posted by Peter Rudegeair.