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Speaking to the Council on Foreign Relations Randall Stephenson, CEO of AT&T reiterated that the proposed AT&T/T-Mobile deal would not create a “duopoly” as most customers have five or more mobile choices and that costs would decline further as mobile broadband traffic grows. Someone needs to tell me where Randall Stephenson gets his fairy magic. His belief is that the overnight addition of T-Mobile to the AT&T portfolio is going to “immediately improve mobile phone reliability by increasing capacity 30% immediately.” T-Mobile runs an independent network until the day the deal closes so I’m having a hard time buying his viewpoint that overnight coverage would improve.
Stephenson stated that by combining the cell sites over the next five years coverage would further increase down the road. Stephenson then reiterated one of the foremost points of the merger with a combined AT&T and T-Mobile capable of covering 95% of the population with wireless broadband coverage.
In response to a question from a Reuters reporter regarding the New York Attorney General expressing concern over the proposed deal, Stephenson stated that was in fact wrong as most New York residents have a choice of six providers. There is an expectation from AT&T that the government will review the deal on a “market-by-market” level. In particular, areas like Miami (I can personally attest to this), Detroit and San Francisco where T-Mobile isn’t even in the top 4 competitors.
The bottom line is that AT&T faces a tough and uphill battle in closing this deal and will likely have to divest a lot of spectrum to the competition. Even so, Stephenson is prepared to do just that in order to gain the bulk of T-Mobile’s spectrum.