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Speaking at a Goldman Sachs investor conference, Verizon CEO Lowell McAdam defended the AT&T/T-mobile deal and highlighted an understanding over the industry’s spectrum crunch.
“I have taken the position that the AT&T merger with T-Mobile was kind of like gravity,” McAdam said. “It had to occur, because you had a company with T-Mobile that had the spectrum but didn’t have the capital to build it out. AT&T needed the spectrum, they didn’t have it in order to take care of their customers, and so that match had to occur.”
This is the first time the Verizon CEO has come out and stated such a position on the potential deal although Verizon remains officially neutral on the deal.
McAdam went on to further say that if the government plans to stop similar mergers they need to ensure that spectrum crunches aren’t going to develop industry wide. Even if Verizon was to publicly support the AT&T/T-Mobile deal it wouldn’t have much effect as many would sense an ulterior motive. An approval of the AT&T/T-Mobile deal would open the doors for Verizon to make acquisition decisions in the future. In other words, Verizon supports the deal because if it doesn’t go through, Verizon can’t go on a shopping spree and pick up smaller competitors or even make a play for Sprint in the future.
When it’s comes to ulterior motives Jim Cicconi, AT&T’s Senior Executive Vice President of External and Legislative Affairs delivered a statement to BGR:
“Yesterday, the CEO of Sprint said the Department of Justice should block AT&T from merging with T-Mobile, but would have good reasons to instead allow Sprint to purchase them, For months Sprint has spoken disingenuously about their motives for opposing AT&T’s merger with T-Mobile. Now, Mr. Hesse’s public musings have made their motives much more clear. That they would act in their own economic interest is not surprising. That they would expect the United States Government to be a willing partner certainly is.”
This statement is in response to Sprint CEO Dan Hesse opening up regarding his view on other industry deals that the DOJ might view differently. Hesse almost suggested that a “very strong argument” could be made that regulators would look at a potential deal between Sprint and T-Mobile far differently than a deal between AT&T and T-Mobile.
“I don’t believe that what the DOJ said in any way, not even a little bit, should be viewed as we want to keep four,” Hesse said at an investor conference. “My view is [the Justice Department] would look at other consolidation very differently.”
As a recap, everyone seemingly has ulterior motives, there isn’t enough spectrum and Verizon’s CEO wants to see the deal go through so he can buy every other carrier in the Americas. Just kidding about that last part. I think.