Verizon COO: AT&T/T-Mobile merger will ‘probably go through’

By on Jul 21, 2011 at 3:35 PM
Business July 21, 2011

Speaking during a recent Fortune Brainstorm Tech conference, Verizon’s Chief Operating Officer Lowell McAdam said he expects AT&T’s proposed $39 billion acquisition of T-Mobile USA to be approved by government regulators. “I’d say the merger will probably go through,” McAdam said. “It’s a merger AT&T probably had to do.” While other carriers such as Sprint have been vocal in their opposition of the deal, Verizon has remained relatively quiet. According to Reuters, McAdam said he was surprised AT&T hadn’t purchased T-Mobile sooner and that the deal “makes sense.” On Wednesday, Senate Antitrust Subcommitee chairman Herb Kohl called on the FCC and the Justice Department to block the merger and said the deal would be “contrary to antitrust law and not in the public interest.” AT&T quickly shot down Kohl’s statement and said Kohl ignored “the many positive benefits and numerous supporters of the transaction.” Among those supporters is Senator Mike Lee, who argued that the “mobile phone market is a critical component of our nation’s economy and the proposed merger between AT&T and T-Mobile deserves careful review.”

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  • Anonymous

    A careful review followed by a “Hell No”

  • Anonymous

    I just dont see how everyone isnt against this? They are just rebuilding the AT&T that was broken down 20+ years ago because the company was too big. AT&T should invest that 39 billion into there network to make it stronger. Less competition is horrible for the consumers and Verizon doesnt care because with less competition they can keep their prices high with AT&T which is good for them. 
    I love how they say its going to create jobs? How does merging with another company creates more jobs. You are going to consolidate your position because there will be duplicates of position or local stores that are close to each other. So i dont see how this will create jobs. 

    • http://twitter.com/aids_ftw aids_ftw

      As the network becomes bigger they’re going to need more people to run it. More people on the ground to do dirty work, and people in the offices handling all the paperwork or network. This could also pressure other providers to step their game up too, maybe other providers will merge and try to take over. 

      • Anonymous

        I mean lets get a few things here straight. Ofcourse as a company gets larger they will have the need for more employees but this is different. If there is a t-mobile store 2 blocks away from an AT&T store what do you think is going to happen? They are going to keep both. Or if you have a T-mobile development center and an AT&T development center you think they are going to keep both? They are going to keep what they need and fire the rest. That is just fact. 

        Also you realize that Verizon and AT&T will control more then 80% of the market with sprint being the next biggest which is still far from the two. That is too big to compete against fairly period, all the smaller company’s can merge all they want they wont be able to stand up to the strength of AT&T and Verizon. They can also have behind closed door negotiations  to keep out competitors, all things that companies in situations like this have done before. Again this is no way a good idea and will only benefit AT&T and Verizon not the consumers.

      • Omari McCord

        As the network increases AT&T will need to increase its staff, but not to the levels of T-Mobile’s current workforce. People are going to lose jobs. Lots of People. Lets keep it real, AT&T is in it for the money and having more staff than necessary cuts into their profits.

      • Anonymous

        Can you name me a company that’s not in it for the money? Just one is all I need.

      • Omari McCord

        @1jaxstate1… Well if you wanna go there than any Non-Profit. This is not to say that the people working their aren’t working for the money, because they most deffintely are. However the company, must end the fiscal year without profiting any money. I will consider that a “company”– not workforce– not in it for the money — profit –. Happy.

      • numetheus

        The only companies not in it for the money are non profit company. Since when has ANY telecommunications company been non profit? As a matter of fact there are no non profit CORPORATIONS who aren’t in it for the money. The goal of all corporations is to make money. Do people really buy and sell non profit shares? LOL. Your comment makes you sound extremely naive.

        Att is a CORPORATION. Publicly traded.

    • http://twitter.com/TimHainesPhotog Tim Haines

      39 Billion, or 39 TRILLION won’t make spectrum materialize (unless you buy a company that owns the spectrum you need, such as T-Mobile!).  And without spectrum you can’t build a network. 

      • Anonymous

        They dont NEED it they WANT it. Verizon is doing just fine with what they have. AT&T just had a record quarter looks like they are doing just fine too. 

      • Nope Com

        No, they need it.

      • Anonymous

        Doesn’t att already have more spectrum than anyone else?

      • Bullet Tooth Tony

        This question just shows misunderstanding about the real facts.  Nobody cares what they theoretically “could” do with their 2G/3G spectrum.  This is about the future and future ability to compete.  AWS, which T-Mobile is launching HSPA+ on continually, is the GSMA global band for LTE.  T-Mobile owns nationwide AWS.  As does Sprint, with cable companies, which will likely go unused because Sprint are run by a bunch of retards.

        I digress… AT&T has minimal AWS coverage, and even then only west of the Mississippi.  Verizon has the same, but east of the Mississippi, with huge chunks in large cities.  If globally phones will always be made with LTE radios pointing to AWS (also, the fastest spectrum for LTE, the sweet spot of in-building penetration and high speeds), and the US AWS spectrum is HSPA… what good are unlocked phones?  How is this different than having CDMA phones?  An AT&T buyout of T-Mo would allow them nationwide AWS coverage.. it would come with forced divestitures in their redundant AWS holdings… Verizon would certainly be on the receiving end.  And now, there’s 3 companies with nationwide AWS coverage, instead of 2, and all 3 would be capable of launching LTE on it… joining the world.

        So ask yourself… do you want unlocked phones and better competition?  Or a walled garden of phones, weaker competition, and choices between who sucks the least?

      • Anonymous

        Then why has AT&T “warehoused” a significant portion of their existing wireless spectrum and refused to use it? Because they don’t want to invest in their network like Verizon, Sprint and even T-Mo have. They just want to charge some of the highest prices in the industry on a shoddy network. Right now, AT&T’s national wireless “footprint” isn’t even 100% 3G, let alone 4G. A lot of it still runs on the old EDGE (2G) network. AT&T is notorious for not spending the necessary dollars on their infrastructure. It’s all about their bottom line and to hell with its customers. They could easily use the $39 billion price tag to improve their network and make it BETTER than Verizon’s. They have more spectrum than Verizon, yet complain about how bad their network is…well, fix it with what you have! Use the warehoused spectrum!

    • http://twitter.com/smartphone_info Smartphone Report

      Remember though, it wasn’t more than a few years back that AT&T’s wireless rep was so bad that they sold out to Cingular before getting rebranded to AT&T – without the wireless tagged on the end…

      We still stick to our guns and say “Speed” pricing is the future, not “Total Data” pricing… Pay for Kbps not for GB…

      • Anonymous

        Att and att wireless were two separate companies. Cingular bought att wireless than att bought a controlling interest in the parent companies of cingular wireless.

  • http://twitter.com/aids_ftw aids_ftw

    I hope so, This will give me service in areas I’ve never had. Not to mention a more wide variety of phones.

    • Anonymous

      Plus higher plan rates also : )

    • Anonymous

      T mobile doesn’t really have spectrum in rural areas, so if you live in one of these areas things really won’t change for you.

  • Ryan Bailey

    I don’t understand when anyone says this benefits the customer. Less competition = good? WTF?

    • Anonymous

      Was T-Mobile really competition for Verizon and AT&T though?  I don’t think T-Mobile was a big enough influence to affect any of VZW’s decisions on pricing, device lineup, network roll out, etc.  It was not a threat.

    • http://www.facebook.com/applelover Tim Meesseman

      Better service and better phones for AT&T and T-Mo customers?

      For the most part, the only people butthurt over this are T-Mobile customers who are afraid their plans will go away. But that’s all speculation, so in the end, I’m erring on the side of “good for the consumer”.

      • CMC

        Higher prices and significant restrictions…”good for the consumer”???  Really?  Honestly?

      • Bullet Tooth Tony

        So then, what you’re saying is… when T-Mobile launched its nationwide network in 2002…. cellular prices went down.  Right?  So if I look over my historical bills for the past decade, my prices actually got cheaper?  Oh wait… that didn’t happen.  They’ve gone up astronomically…. and the only time they went down was in the 90s, when buyouts and mergers were happening, forming what is today Verizon and AT&T…. hmmmmmmmmmmmmmmmmmmmmmmmmmmmm

  • Anonymous

    Why would I pay those rip off retail prices when I got an iPod for $35.33?. And it was delivered right to my house. From now on, all my stuff comes from GrabNow.com .

  • http://twitter.com/smartphone_info Smartphone Report

    The argument that this will create more jobs is just hilarious… Yes, you will see an increase in the number of AT&T trucks and workers maintaining the network, but you will see a total absence of T-Mobile trucks, stores, techs, billing agents and other 3rd party support personnel that normally assisted T-Mo subscribers.

    AT&T will continue to outsource their call centers to other countries for a fraction of what it would cost to run it here and continue to turn billions of dollars in profits every year. Ultimately, a large chunk of those billions will be sent to Deutch Telekom because they will be a principle owner in the new company. Once again, American dollars being shipped off to another country, padding their economy while ours suffers.

    If Congress and the Senate have half a brain, they will allow the merger with the following stipulations…

    1) Call centers must be based in the 48 contiguous states, Alaska or Hawaii.
    2) At no time may a foreign interests control more than 35% of the company.
    3) AT&T is solely responsible for paying all costs associated with the layoffs created from the merger.
    4) Rate increases may not exceed 10% per year for the first 5 years of the acquisition.
    5) AT&T must grant GSM roaming agreements to smaller carriers at pricing at or below wholesale rates and actively support the carriers efforts to obtain state of the art hardware.
    6) LTE technology must be shared between major carriers with as much ease as possible. Verizon has all but said their network won’t work with AT&T, but that doesn’t mean Light Squared or “Dual Band LTE” phones wouldn’t work between the two/three carriers.
    7) AT&T must give all customers 30 days notice to withdraw from current contractual obligations due to the impact of the new users on their network.

    If the government stepped up and made AT&T stick to something like this, the merger may not look so bad.

    • Anonymous

      Do note that the following stipulations have nothing to do with the anti-trust laws that the merger has to make its way through. There are several reasons why the government isn’t hasty to let AT&T take over T-Mobile. 
      1.) AT&T has an age old record of poor customer service and consumers don’t see that changing as the same people who run the company will still be in charge.
      2.) As I’m sure many have noted, with T-Mobile gone, the competition between AT&T and Verizon just became non-existent. Prices will go up. Welcome to reality.
      3.) A ton of jobs will be lost. In a fortnight, most of the technicians of T-Mobile will be out of a job. Not exactly what we’d like for a nation that’s already losing more jobs than we make.
      4.) Neither T-Mobile or AT&T planned to have nationwide LTE services for at least two or three years. 
      5.) T-Mobile is a foreign interest. They’re a German-based company. As this is a merger and not a takeover, the company is still publicly owned by both US and German shareholders. 

  • Anonymous

    Sprint better try to gobble up US Cellular or something.  It’s going to be an ant among giants.

  • Hoyt

    Questions it Att does not buy tmobile who will? Because tmobile parent company is looking for buyer..

    • http://twitter.com/smartphone_info Smartphone Report

      True, but with this deal DT owns a big chunk or AT&T – so who really owns AT&T with this deal?

      • Dan I

        8% is more like a sliver.  

  • Anonymous

    I am surprised Verizon isn’t scared. They probably just happy cause they’re light years ahead of AT&T in the 4G LTE dept.

  • http://www.vgchartz.com SuperChunk

    They don’t care because they probably are considering buying Sprint to finish everyone off.

    • Anonymous

      Then, that would really getting the FCC and DoJ started. Verizon can’t buy what is not on the auction block.

  • Dragon

    Let’s look at the situation objectively. What do we know?

    1. T-Mobile is gone. They are losing money and will NOT continue to compete in the market. The question isn’t whether T-Mo will stay and keep the status quo–because they will not. The only question is WHO buys them.

    2. Sprint is in a very precarious position financially. Any large expenditure dramatically weakens their leveraged position deep into the realm of critical. What they need is a lot more cash in to stabilize their position or they quite possibly will go belly-up.

    3. The exit of T-Mo from the marketplace removes Sprint’s main competitor in the cost-conscious major carrier part of the market.

    So, for Sprint to survive they need lots of cash. If someone buys T-Mo and charges high rates, Sprint is the most likely carrier to gain those cost-conscious customers. So from a Sprint perspective the demise of T-Mo is great for Sprint business. Sprint can even raise it’s rates significantly and remain the low-cost carrier option. That’s a major win for Sprint.

    If Sprint leverages itself to buy T-Mo, it increases the risk of bankruptcy tremendously. Classic case of trying to bite off more than you can chew because of delusions of grandeur. Even if Sprint succeeds in preventing ATT from acquiring T-Mo and further succeeds in acquiring T-Mo itself, Sprint will not have a network capable of charging the rates Verizon and ATT can charge. Unless they significantly raise their rates they will have paid a huge price to acquire a money-losing venture, and further committed a lot of money to retrofit that network to change T-Mo’s GSM customers over to CDMA and requiring them to buy a new phone using that technology.

    To consumers it would raise costs and require buying a new CDMA phone. To Sprint, it would be putting a financial anchor around one’s neck while treading water stranded in the middle of the ocean.

    So the real question we need to be asking is, who is a better buyer than ATT? It’s definitely not Sprint or Verizon, so who? And why?

  • http://twitter.com/HireMeAccenture HireMeAccenture.com

    I believe it will go through. Sorry Sprint!
    Help Me Get A Job!!!
    www[dot]hiremeaccenture[dot]com

    Leave A Comment!

  • drew dogg

    Lowell McAdam is a pimp.

  • Marek

    After the merger ATT will be the only carrier for GSM network in the US. It should be bloced.

  • CMC

    He probably wants this to go through.  That we there we can be a duopoly and those two giants can control all wireless and wireless access, pricing, and content.  Ah don’t we all look forward to the day where you get to pay a monthly fee to use each individual application on your phone…in addition to the metering that they insist on.  

  • Anonymous

    Verizon WANTS the AT&T / T-Mobile merger to go through since they stand to profit by the elimination of a low cost competitor. This also sets a precedent that paves the way for them to go after Sprint thus creating a Duopoly that benefits both carriers. You can be sure that there is not already a Gentlemen’s Agreement between AT&T and Verizon there soon will be. They will agree to avoid a price war by holding pricing where it is and if one raises prices the other will follow suit. 

  • Anonymous

    Really don’t want the merger to go through. cause I don’t want T-Mobile consumers plans get a high spike in price or get their unlimited data thrown away like I did cause I’m stuck on AT&T even though i hate to say it. This won’t create jobs AT&T it will take away. cause I remember when I read bout the merger. at my local mall I saw only AT&T/Verizon/Sprint booth. and T-Mobile wasn’t their Sprint took it over. the Mall wouldn’t let AT&T add a second store which is good cause it’s B.S. AT&T won’t allow T-Mobile open any new stores or booths

  • Anonymous

    That’s Verizon CEO to you 

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