AT&T’s Donovan on T-Mobile/Sprint merger: We won’t contest it

AT&T sign
Any merger activity in wireless is going to come with both challenges and opportunities, according to AT&T's John Donovan. (FierceWireless)

AT&T has its hands full with its own planned acquisition of Time Warner, but it isn’t going to stand in the way of another big proposed merger, that of T-Mobile and Sprint.

“We certainly won’t contest it,” said AT&T Communications CEO John Donovan at the MoffettNathanson Media & Communications Summit, which was webcast. “If you look at where we are as an industry in wireless, each of the competitors out there is embarking on a very different strategy.”

Considering the type of content going over wireless and the next evolution of the network, “you have a bunch of things that are tectonic shifts occurring at the same time and I think each of us has embarked on a slightly different version,” he said, adding that any merger activity in the industry is going to be a simultaneous challenge and an opportunity.

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“I think that the landscape in wireless is as exciting as any time in my career,” he said, noting 5G and other opportunities, including bundling. “Our focus is going to be on executing the strategy that we’ve picked, which is unique to the industry.”  

AT&T tried to acquire T-Mobile in 2011, but regulators balked at that deal. T-Mobile and Sprint have been lobbying hard with various agencies in Washington, D.C., to convince them it’s a win for consumers, and this proposed tie-up is likely more tolerable given perceptions about Sprint’s tenuous situation if it doesn't hook up with someone.

RELATED: AT&T: LTE speeds will double thanks to FirstNet

Of course, FirstNet is a big part of AT&T's overall strategy, and first responders will have an opportunity to opt in and switch over to AT&T. The operator is spending on the order of $2 billion this year on the network side of things, and that augmentation will benefit consumers as well, according to Donovan.

FirstNet, which gives AT&T access to 20 MHz of 700 MHz spectrum, is also helping its strategy in rural markets. If you look at where T-Mobile and Verizon are succeeding in wireless, they’re at polar opposites, with T-Mobile focusing on urban areas and Verizon being much more rural, he said.

“FirstNet gives us a great opportunity to go into the rural markets,” he said. Not only is it building a network for first responders, but “it dawned on us that we should also be putting up stores and going after the consumers. I think Verizon is going to have its hands full with our strategy going forward in the more rural areas.”