The list of suitors for a more-than-50% stake in Huawei Technologies
Co. Ltd.'s handset business could include AT&T Corp., Verizon
Communications Inc. and Vodafone Group plc, according to a report in
the South China Morning Post. The story said that PE firms such as
Blackstone Group LP, TPG Capital and Kohlberg Kravis Roberts & Co.
could also have an interest.
Combining a stake in the Chinese telecom
equipment company's mobile phone business with a large U.S. carrier
would revisit an earlier time in telecom history, when the phone
company controlled both the network and the actual phones.
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"We're not just going back to 1982; we're going back all of the way,"
joked Blair Levin of Stifel, Nicolaus & Co. regarding the
speculation. "We're not just putting back long distance and local," he
quipped. "We're putting together long distance, local and equipment."
Levin
referred to the breakup of the old AT&T, which was cemented in a
1982 settlement between the government and the telecom and became
effective in 1984. A combination of an incumbent carrier like AT&T
Inc. or Verizon Communications Inc. with an equipment maker could raise issues that date back to
the Federal Communications Commission's Carterfone decision in the
196's. The momentous ruling established that people could use devices
that weren't sanctioned by the phone company as long as they didn't
harm the network. It opened the way for greater competition. More
recently, eBay Inc.'s Skype Technologies SA has raised similar issues
with regulators regarding wireless networks.
Of course, the market for telecommunications services and devices has changed greatly since Ma Bell's heyday.
"I
think there would be some sort of antitrust review of it, which would
be interesting," added Levin, a former Federal Communications
Commission chief of staff. "The Justice Department could decide that
the equipment market is irrevocably competitive," he added.
TPG,
KKR, AT&T and Verizon Wireless, the wireless joint venture of
Verizon and Vodafone Group plc, declined to comment. A representative of
Blackstone could not be reached. - Chris Nolter
See the South China Morning Post story (subscription required)
