AT&T may very well look for a smaller wireless company to buy now that it has given up on plans to acquire T-Mobile USA, or it may just wait for a new administration in Washington, D.C., two UW-Madison School of Business finance experts say.

"They've got some difficult decisions to make. The government now has set the bar," said Jim Seward, director of the Nicholas Center for Corporate Finance and Investment Banking.

Seward said he was not surprised the $39 billion deal for AT&T to purchase T-Mobile fell through earlier this week.

"From the very first day, I thought they were going to run into difficulties with the regulators. I don't know if it was arrogance or over-confidence on the part of AT&T, but it seemed very clear from the very beginning they were going to run into some headwinds," Seward said.

Assistant professor Oliver Levine said he thinks AT&T may wait until a new president is elected before trying another merger. "In a different political environment ... they may try to do it again," Levine said.

He called T-Mobile a "natural target" for AT&T and said the telecom giant may go after that company again.

AT&T wants more broadband capacity because smartphones and tablets now carry the dense data transmissions that used to be reserved for computers, such as videos, photos, music and games. "That can strain the capacity of your network," Seward said.

But Andrew Petersen, vice president-external affairs and communications for TDS Telecommunications Corp. of Madison, said he was "quite surprised" by the opposition from the Justice Department and the FCC.

"There were far larger acquisitions that have been approved in recent years," Petersen said, citing Comcast's merger with NBC Universal last January as an example.

Asked if U.S. Cellular might be AT&T's next acquisition target, Petersen would not comment. "I'm sure AT&T will aggressively look at alternatives," he said.

U.S. Cellular is a sister company to TDS Telecom. Both are owned by Telephone and Data Systems, Chicago.

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