AT&T reportedly considering buying a European wireless carrier

AT&T (NYSE:T) is hunting for merger and acquisition opportunities in the European wireless market, according to a Wall Street Journal report, betting it can roll out LTE technology there faster and make more money from new pricing schemes. The report, which cited unnamed sources familiar with the matter, said AT&T executives are debating the wisdom of such a move, but that the United Kingdom, Germany or the Netherlands might be potential markets to explore for a deal.

The report said a deal, if one comes together, could happen before the end of 2013. Such a deal would potentially give AT&T new growth opportunities but is also fraught with risk. EE in the United Kingdom, co-owned by France Telecom and Deutsche Telekom, and KPN in the Netherlands are on AT&T's radar, the report said. 

AT&T declined to comment on the report. KPN also declined to comment, according to Reuters.

Such a deal for a European carrier would carry substantial risks. AT&T would likely not be able to make deep cost cuts often associated with blockbuster mergers because the companies' wireless networks would not overlap. Additionally, AT&T would have to face a host of European regulators. AT&T operates internationally through its enterprise arm, which serves multinational corporations, but it is not focused on serving consumers in Europe. AT&T would also face tighter competition in Europe than it has in the United States and weaker economic conditions.

Last June, AT&T CEO Randall Stephenson did not seem overly enthusiastic about expanding beyond the United States when he was asked about it at an investor conference. "We'll take a hard look," he said, adding "It isn't a high priority for me to go find options outside the U.S. right now."

AT&T tried and failed to acquire T-Mobile USA for $39 billion almost two years ago.

Interestingly, if AT&T pursues a European carrier, the transaction would essentially be a mirror image of Softbank's proposed $20.1 billion acquisition of 70 percent of Sprint Nextel (NYSE:S). Japan's Softbank intends to use the deal to springboard into the U.S. market, spark more competition and gain access to larger spectrum reserves through Sprint and its proposed $2.2 billion deal for Clearwire (NASDAQ:CLWR).

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this CNET article
- see ZDNet article

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