Back in March, AT&T had announced its $39 billion plan to acquire T-Mobile USA, the nation’s fourth largest national carrier. Since the announcement was made, AT&T’s largest competitor, Verizon Wireless, was surprisingly silent on its position about the merger while Sprint and a number of regional carriers are vocally opposed to the acquisition, calling on reviews from state attorney generals, legislators, the Department of Justice, and the FCC to review the impact of the merger on competition in the wireless industry. However, at a recent Fortune conference, Verizon Wireless seems to not only be optimistic about the proposed merger being approved by the government, but is implicitly supporting AT&T’s position.
Verizon’s COO Lowell McAdam says that “It’s a merger AT&T probably had to do,” suggesting that not only did the merger make sense, but is a business and competitive necessity for its next largest rival to expand and grow its wireless business. In its defense for the merger, AT&T had often resorted to arguing that the acquisition of T-Mobile would give the carrier enough spectrum to deploy 4G LTE to 97% of all Americans instead of the approximately 80% that’s being targeted today.
That may not be the case. Rival Sprint in its opposition of the merger had gone as far as devising a business strategy for AT&T in how to best utilize its available spectrum to blanket the nation with LTE.
As the acquisition is still under government scrutiny, Verizon’s McAdam says that he thinks the merger will go through.
If the merger does go through, AT&T and Verizon Wireless would control 80% of the wireless market combined. Its next closest competitor would be Sprint with a 15% control of the national market, with the remaining shares of the market divided among regional and rural carriers.
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