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AT&T EE Takeover Possible In 2013 – Report

Report suggests that EE and Dutch KPN are potential targets for AT&T expansion

On by Steve McCaskill 0

US carrier AT&T is reportedly considering acquiring a European mobile operator, possibly EE or the Netherlands’ KPN.

The Wall Street Journal reported that although it is unclear whether AT&T is actively involved in any negotiations, executives at the company sense there could be a “unique opportunity” to acquire a European counterpart by the end of 2012.

Deutsche Telekom, which co-owns EE with France Telecom, was reported to be receptive to interest from former EE boss Tom Alexander, who was in discussions with private equity groups about a possible takeover bid.

AT&T EE takeover bid

AT&T has apparently debated entering the European market for the last decade, but now believes that conditions are more favourable for expansion than those that currently exist in the US.

Fierce competition and the economic problems in Europe have hit operator’s share prices, while companies have been slow to roll-out 4G networks. Revenues are still largely dependent on voice and text services and AT&T believes that there is a chance to get a head start on shifting customers onto lucrative data-based pricing schemes that are common in the US.

In contrast, the majority of smartphone users in the US are already on these contracts, raising fears of market saturation. AT&T abandoned its £25 billion bid to take over rival T-Mobile USA in December 2011 after regulators and rivals raised competition fears. Yet competition is likely to increase once Japan’s Softbank completes its takeover of Sprint Nextel later this year.

However, it has been noted that such transatlantic ventures have yielded mixed results and that many of the advantages of merger would not be present. There would be no overlap of networks and therefore fewer opportunities to make the cost savings that often justify such a large outlay.

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Steve McCaskill
Author: Steve McCaskill
Deputy Editor
Steve McCaskill Steve McCaskill
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