Verizon does not oppose AT&T/T-Mobile merger
As long as it does not come with new regulation, the US telco is more concerned about achieving a more balanced smartphone market
Published: 21 November, 2011
READ MORE: M&A | US | LTE | Windows Phone
As Sprint leads the opposition to AT&T's proposed takeover of T-Mobile USA, larger rival Verizon is far more sanguine. The telco's CFO, Fran Shammo, told a Morgan Stanley conference in Spain last week that he saw no major problems with the merger, as long as it did not result in increased regulation.
He said he believed the US industry needed consolidation, but this must come without new regulation from the FCC. Unlike Sprint and some regional operators, Verizon has largely stayed out of the escalating debate over AT&T's plan, which faces an attempt by the Department of Justice to block it on antitrust grounds. "We have been very silent on this one," Shammo told the conference. "The reason we've been silent we said there needs to be consolidation and as long as there is consolidation without regulation we don't have an objection to it."
Shammo also wants to see a shake-up on the device ecosystem side, where the rising power of Google and Apple may well be seen as a greater threat to Verizon's freedom of action than an enlarged (but, we may assume, still lumbering) AT&T. Shammo said he would like to see a third strong smartphone platform and thinks Microsoft could fulfil that role since its deal with Nokia. While AT&T has been the main focus of speculation over Nokia's US launch strategy, Shammo said Verizon would be happy to sell the new Lumia devices once they reach American shores in the new year.
Meanwhile, Sprint's own plans to regain its 4G headstart and catch up with Verizon on LTE may be threatened by further problems at its WiMAX joint venture Clearwire. According to The Wall Street Journal, the smaller company is considering skipping a $237m debt payment that comes due in two weeks. Although, with $698m in cash and short-term investments as of the end of September, it can afford to make the payment due on December 1, it also needs to raise sufficient money to sustain its roll-out plans for WiMAX maintenance and migration to TD-LTE and LTE-Advanced. CEO Erik Prusch said in an interview: "It's a very expensive payment that we have. It would be a significant drain of our cash, so we have to evaluate everything in terms of our decision of where we're going."
However, failure to make the payment would run the risk of Clearwire having to file for bankruptcy protection, a threat which some analysts believe is a ploy to put pressure on Sprint to inject more cash into its joint venture. Although Sprint plans to build its own LTE networks, it needs the JV to support its Sprint 4G services in the meantime, and for future access to Clearwire's huge spectrum reserves. Earlier this month, Sprint raised $4bn in the bond markets and told investors it might use some of the funds to support Clearwire's network expansion.
More M&A News
More US News
More LTE News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
