AT&T CFO: We'd be surprised if regulators approved a Sprint/T-Mobile deal

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AT&T (NYSE:T) CFO John Stephens said it would "surprising" for federal regulators to approve a deal for Sprint (NYSE:S) to merge with T-Mobile US (NYSE:TMUS) so soon after they quashed AT&T's bid to buy T-Mobile.

While he said he did not have any specific view on a transaction--because there is no formal deal between Sprint and T-Mobile--he noted that for several years AT&T has pushed for more industry consolidation because of increasing data demands, capital requirements to upgrade networks, and a shortage of available spectrum. He noted that the government obviously disagreed, thwarting AT&T's proposed $39 billion takeover of T-Mobile in 2011.

"It would be interesting to see if the government varies from that," Stephens said, speaking at the Deutsche Bank Media, Internet & Telecom Conference. "I don't think they will." He said the industry would have to see what happens, but that it "would  be surprising today if they changed or reversed that opinion."

SoftBank CEO Masayoshi Son has now explicitly called for a deal between SoftBank-owned Sprint and T-Mobile, and has said combining the No. 3 and 4 wireless carriers would spark a "massive price war" and more competition in the U.S. market.

Regulators have expressed skepticism about such a merger, preferring to keep four national wireless players. Antitrust regulators at the Department of Justice have been particularly vocal in their skepticism, while FCC Chairman Tom Wheeler has said he would keep an open mind on any deal. However, Wheeler has also voiced support for maintaining the prevailing structure of four Tier 1 carriers.

"We would like to make the deal happen, but there are steps and details that we have to work out," Son said during an interview with PBS' Charlie Rose earlier this week, where he pushed for a Sprint/T-Mobile transaction. "We have to give a shot."

In other M&A news, Stephens said AT&T is now more squarely focused on the U.S. market--instead of Europe--than it was six months or a year ago. "We see the window of opportunity on owning assets there [in Europe] may be closing," he said.

The statement is notable considering AT&T had previously been rumored to be interested in a takeover of a European carrier like Vodafone.

"Things have changed," Stephens said, pointing to AT&T's focus on its Project VIP network rollouts of LTE and U-verse TV in the U.S., LTE rollouts in Europe and Comcast's bid to merge with Time Warner Cable.

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