Randall Stephenson, AT&T Inc.'s new CEO, told the Financial Times that the telecom giant is not interested in additional deals at home or abroad. Instead, AT&T plans to grow by providing services to big multinational customers.
Is Stephenson sincere? After all, he was the chief lieutenant of Ed Whitacre, who basically reassembled the old Ma Bell through a series of mega-acquisitions. In addition, on May 31 at a Lehman Brothers Inc. conference, Stephenson went on the record saying, "Our goal is pretty simple: We want to win the home."
While going after multinational business customers is a wise move considering that cable companies are eating up the consumer market with so-called triple-play packages, Stephenson's comments make him sound like a flip-flopping politician. However, the article only addresses telecom acquisitions, namely Vodafone plc, and not domestic deals that could shore up AT&T's consumer offerings. Perhaps the story doesn't paint the full picture.
Continue reading below
While AT&T's recent spat of U.S. acquisitions may have antitrust authorities crying foul should it try to buy domestic rivals Qwest Communications International Inc., Sprint Nextel Corp. or Verizon Communications Inc., Ma Bell may have little problem trying to buy either U.S. satellite TV provider EchoStar Communications Corp. and DirecTV Group Inc. Either pay-TV service would provide AT&T a national platform to compete with Comcast Corp. and Time Warner Cable Inc. with a "triple-play plus wireless" plan.
In addition, the FT failed to address whether AT&T has the infrastructure abroad to provide the services necessary to win multinational contracts from market leaders BT Group plc and Verizon. Vodafone could provide some of the necessary pieces. However, Stephenson could be waiting for the British wireless provider to unwind its stake in Verizon Wireless before he's willing to make an offer, which would explain why he's not interested in Vodafone right now.
Ultimately, Stephenson may have to follow his mentor's lead and seek acquisitions in order to meet his objectives. —Matthew Wurtzel
See story from the Financial Times
See May 31 story from TheDeal.com
See May 4 story from TheDeal.com
