On Tuesday, Sprint Nextel Corp. sued to block AT&T Inc.’s proposed $39 billion purchase of wireless carrier T-Mobile USA Inc. less than a week after the U.S. Justice Department moved to halt the transaction.
As the hurdles to the merger mount, David Mancuso, vice president of external affairs for AT&T, stopped by the Providence Business News offices as part of a nationwide public relations campaign to create grassroots support for the company’s proposed merger.
Mancuso said it makes sense for AT&T to take T-Mobile on because the wholly owned subsidiary of Germany’s Deutsche Telekom is not planning to invest in its U.S. assets at the moment, and, unlike Verizon, both AT&T and T-Mobile operate on GSM – Global System for Mobile Communications – technology.
AT&T has about 26,000 WiFi hotspots nationally, nine company-owned retail locations in Rhode Island and employs 150 workers here.
PBN: Why is this deal important to AT&T?
MANCUSO: We had taken an approach to purchasing spectrum from the [Federal Communications Commission] that is a little bit different from some other companies. Some companies went out a couple years ago in the auctions and said “We are going to buy up – we don’t know how the heck we’re going to use it – but we are going to buy every ounce we can get our hands on because we know it’s a limited commodity and then we’ll figure out the business model later.”
We took a slightly different approach and said – to be responsible for our shareholders – we’re going to buy the spectrum we think we can grow into. The challenge is for us, is that we grew into it very, very rapidly.
PBN: One of our local companies, Towerstream, recently launched its pilot offloading WiFi network … Would this be something you’re interested in?
MANCUSO: That’s great … that’s great. We are making a major investment in WiFi because there’s limited capacity in spectrum. The more we can get you off the network and into a WiFi environment, the more the mobility component of that network adds value.
The technology is going to get even better because the device is going to be able to self-select – what’s the best thing for me based on my plan? Oh, I’m in the network, I’m mobile? – I want to use the mobile network. I’m off the network, I’m stationary? I want to default to the nearest open WiFi.
WiFi is a big part of how we’re going to manage the evolving world, absolutely.
PBN: How quickly is 4G going to become antiquated?
MANCUSO: The straight answer on that one is what version of 4G are you talking about? It’s going to evolve over time. I know we’re talking about ubiquitous LTE rollout within the next four years. There are some LTE spots available today, it just depends on the device.
It’s always a tough question to answer. How fast? For the early adopter? It’s now. For the next generation of the technology, it’s a couple years away. When you talk about critical mass … it’s a couple years away.
PBN: You say that the merger will create 90,000 new jobs. AT&T has about 300,000 employees and T-Mobile, about 37,000; wouldn’t you have a lot of redundancies?
MANCUSO: In terms of jobs … obviously there’ll be some efficiencies that we’ll find. Typically, we’ll keep as many of the people that we possibly can. That growth number that we’ve talked about is really the multiplier effect – it’s not just us as an organization, it’s what’s going to happen when we enable telehealth, distance learning, and [other] applications.
PBN: Let’s play devil’s advocate. What happens if you don’t get the regulatory approval?
MANCUSO: Not having this merger happen is not good news for us. It may be good news for our competitors. Then you have to decide whether you want to pick a side in that conversation.
It’s also not good news for the consumer or the economic development side because the more folks you have out there that are stronger delivering these services, the better off you’re going to be.
And T-Mobile, quite frankly, is not going to be one of those companies. [Deutsche Telekom] has been very clear that if [T-Mobile] is not sold, that they will not invest anything in the T-Mobile network, because they have the same challenge in their primary market which is Europe.
Plan B is we have to go find more spectrum, we have to continue to go out to the marketplace. Plan B is ‘wait and see’ what the FCC does in terms of spectrum that exists interstitial broadcast spaces … ‘Wait’ is the operative word there.
