GreenBkk.com Tech | Analysts View: AT&T deal to buy T-Mobile USA creates new leader

Analysts View: AT&T deal to buy T-Mobile USA creates new leader

NEW YORK | Sun Mar 20, 2011 6:57pm EDT

(Reuters) - AT&T Inc's surprise $39 billion deal to buy T-Mobile USA from Deutsche Telekom AG will create a new leader in the U.S. mobile sector and likely draw regulatory scrutiny.

Below is a roundup of analysts' views:

EVAN STEWART, ZUCKERMAN SPAEDER LLP, ANTITRUST EXPERT

"Obviously it (the deal) will get a fair amount of scrutiny."

"The regulatory challenge would be figuring out what the dominant form of communication would be in the future. Nobody can predict where the trending lines are three to five years from now."

PHILIP MARSHALL, TOLAGA RESEARCH, CHIEF RESEARCH OFFICER

"The bottom line for any operator, the more spectrum the better and AT&T would get a lot of spectrum from T-Mobile, better network in key markets (like California where AT&T performance is poor), and some operational synergies. However, I think of more importance is the relative market scale that AT&T will have over its competitors. Let's face it, in the U.S. mobile market, scale is king."

(On regulatory challenge) "Regulators in the U.S. do face a challenge in that the market is increasingly becoming a duopoly dominated by AT&T and Verizon. There are no regulatory restrictions based on spectrum caps, but the regulators will almost certainly weigh in on the impact of this deal relative to market competition."

CHARLES GOLVIN, FORRESTER RESEARCH, ANALYST

"The good news: high-speed mobile broadband service will improve in quality and coverage, including - in the long run - those in rural communities outside the reach of terrestrial broadband today."

"The bad news: the cost of that service won't come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the U.S.. While clearly troublesome for Sprint and other mobile smaller mobile competitors, it's also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer."

(Reporting by Sinead Carew in New York, Diane Bartz in Washington D.C. and Nicola Leske in Frankfurt; Editing by Kenneth Li and Marguerita Choy)

Credit: Reuters (www.reuters.com)