AT&T's Stephenson: We will argue for efficiencies from T-Mobile deal
AT&T (NYSE:T) CEO Randall Stephenson said that the company's discussions in court defending its proposed $39 billion acquisition of T-Mobile USA will center on the efficiencies that will result from the deal.
Speaking at the Goldman Sachs Communacopia Conference, Stephenson said AT&T is simultaneously prepared to fight the government and the court and look for ways to come to a settlement with the Justice Department, which has sued to block the deal on antitrust grounds. Stephenson said the deal will result in capacity increases of 30 to 35 percent in some markets if AT&T and T-Mobile's spectrum and network assets are combined.
"Efficiencies will be the core of the debate in court," he said, adding that over the past decade as there has been more consolidation in the wireless industry, prices have come down. "It's an industry where efficiencies are critical to keeping prices in check," he said.
On Wednesday, U.S. District Court Judge Ellen Huvelle set a trial date between the Justice Department and AT&T for Feb. 13. "We're seeking a prompt trial because we're very interested in closing this transaction," Mark Hansen, who was representing AT&T, said at a court hearing. "We need to have the cloud of uncertainty removed. We're already a month beyond where we want to be."
The judge declined to combine Sprint Nextel's (NYSE:S) complaint against AT&T with the government's case at this time, but also did not dismiss the possibility that she would combine the cases. She set a court date for Oct. 24 to hear arguments for doing so. She also said AT&T and the government will need to appear in court again on that date.
Stephenson also touched on the company's LTE rollout, which began this week in five markets--Atlanta, Chicago, Dallas, Houston and San Antonio--and will be expanded to 15 markets and at least 70 million POPs by year-end. He said AT&T's HSPA+ network expansion is now complete nationwide and that the company is "anxious" to offload traffic from its HSPA+ network to LTE, arguing that it will deliver a 30 percent lift on network capacity.
The AT&T chief also said the company is looking to combine LTE with cloud services over the next few years, enabling the streaming of content like music between LTE networks and automobile audio systems. He said that the combination of LTE and cloud services represents a "more dynamic" environment than even the last few years have been in wireless. However, he said the network traffic demands will increase tremendously, and that more backhaul will be required. "While the demands for backhaul will go up, it's going to be a far more efficient backhaul environment," he said, alluding to faster Ethernet backhaul.
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