Comcast, Sprint and T-Mobile are taking close note of AT&T.

James Anderson, Senior News Editor

June 18, 2018

3 Min Read

AT&T officially finished its $85.4 billion acquisition of Time Warner last week, but the move is the tip of the iceberg for M&A among connectivity providers.

Both companies announced the completed transaction Friday, less than a week after a federal judge dismissed an antitrust lawsuit from the U.S. Department of Justice. Experts call the deal a “vertical merger,” which aligns companies from different locations on the supply chain and on paper does not pose an unfair disadvantage to either company’s competitors.

ARS Technica reports that AT&T will consider additional acquisitions in the area of advertising.


AT&T’s Randall Stephenson

“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” CEO Randall Stephenson said at the close of the Time Warner merger.

The AT&T-Time Warner deal for now appears to mainly affect direct-to-consumer entertainment options. We’re seeing a similar move in Comcast, which has bid $65 billion for 21st Century Fox (currently beating out the reported $52.4 bid of Disney). The Time Warner acquisition has helped pressure on service providers to purchase their own media content, but the lasting impact of the deal on the business-to-business technology space may be the number of carriers that try to match AT&T with acquisitions of their own.

Sprint and T-Mobile immediately come to mind. The two companies reportedly sent the Federal Communications Commission an official merger application today. Sprint and T-Mobile announced the $26 billion deal April 29. They are the third and fourth largest carriers in the U.S. and together would pull their resources to stay on level footing with AT&T and Verizon. They would operate under the T-Mobile brand.

While Reuters reports the Department of Justice has been interviewing smaller carriers about the competitive impact this transaction may have, T-Mobile and Sprint see it as a necessary step to force AT&T and Verizon to offer competitive pricing and innovation.

The combined 5G network of the two companies is one of their biggest selling points. Sprint CEO Marcelo Claure said the expanded 5G capabilities will create a “hotbed for…… innovation” that stretches into rural America.

“As we do this, we will force our competitors to follow suit, as they always do, which will benefit the entire country,” Claure said. “I am confident this combination will spur job creation and ensure opportunities for Sprint employees as part of a larger, stronger combined organization.”

We’ve written about the impact 5G will have on channel partners and their customers — and when that impact will take place. 2112 Group CEO Larry Walsh told us last month that the biggest channel impact of 5G will likely be “peripheral services” that are carried along more effectively by the new bandwidth.

“Right now we already have SD-WAN over wireline networks or fiber/coax networks. Just imagine SD-WAN being sold over 5G. Imagine infrastructure automation services — autonomous services through the internet of things –— that require 5G connectivity in order to operate,” Walsh said.

To that point, Sprint launched a new unified communications platform in partnership with Broadsoft back in April. Its SD-WAN solution has been in place for more than a year now. We’ve seen Sprint making deeper inroads with the channel in the last year, and a Frost & Sullivan analyst suggested that the company may be “putting greater emphasis on” customer acquisition.

One carrier has been conspicuously absent from the M&A conversation in recent months: Verizon.

Verizon gave up on a merger with Charter Communications last year, and it remains to be seen if the company will pursue a vertical merger like its chief rival AT&T. New CEO Hans Vestberg, who will officially replace Lowell McAdam Aug. 1, has indicated more of a wait-and-see approach.

“I’m happy with executing the plans we have already laid out,” The San Francisco Gate reports Vestberg as saying in an interview. “We are constantly evaluating things, but there’s nothing that we are looking at right now.”

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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