AT&T Considers Acquisition in Europe To Boost Growth
AT&T is considering buying a counterpart in Europe as soon as the end of the year, which will allow the company fewer constraints to upgrade technology and roll out more lucrative pricing strategies, the Wall Street Journal reported.
The move wouldn’t come without risks. Wireless companies that have pursued international strategies in the past have faced regulatory hurdles and increased competition. AT&T may also have trouble making the deep cost cuts necessary to justify a big acquisition because the networks wouldn’t overlap.
AT&T’s top executives are debating whether a move abroad would make sense, but some believe a unique opening now exists to buy a carrier in a major European market such as the U.K., Germany or the Netherlands, the paper said.
The move comes two years after AT&T’s attempt to buy T-Mobile for $39 billion to expand in the U.S. was rejected by antitrust regulators. AT&T is trying to find other ways to expand as it prepares to face even more competition in the U.S. following Japan’s Softbank acquisition of Sprint Nextel, expected to close at the end of the year.
It is unknown whom AT&T is negotiating with, although it could be one of the European carriers including Royal KPN, the biggest telecom company in the Netherlands, or Everything Everywhere, one of the biggest wireless carriers in the U.K., the paper reported.
Wireless carriers have had an increased interest in expanding overseas as growth in the smartphone market has yet to be fully tapped in Europe, China and India. Also, some European countries have been slow to roll out advanced “4G” wireless networks, which could open opportunities for higher-priced data plans.
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