Feeds

US megalocorp AT&T: We're NOT swallowing Blighty's Vodafone

Does that make T-Mobile a target?

  • alert
  • submit to reddit

Build a business case: developing custom apps

+Analysis Speculation that AT&T was shopping for Vodafone as an entry into the European market has been brought to an end after an exec ruled it out.

At the request of the Takeover Panel, the independent body which regulates the city of London code on takeovers, AT&T has said that it will not pursue Vodafone. The takeover panel refused to be drawn on the specific subject of approaching AT&T but said it looks to provide market stability when there is significant speculation.

The announcement precludes a takeover of the company for at least six months. There had been wide speculation that on the back of Vodafone having divested itself of its share in Verizon – which would have been a regulatory problem for the American operator – AT&T would therefore be free to buy Vodafone.

You might remember that German operator Mannesmann bought Orange in the UK in a bid to block a Vodafone takeover – and found itself out-manoeuvred in 1999 when Vodafone slurped Mannesmann itself along with Orange, which it was forced to spit out (it had to "divest itself" of the brand, selling it off to current owner France Télécom so the EU would approve the deal).

Analysis

But this poison-pill strategy might work for Vodafone if it wanted to ensure protection from AT&T by buying T-Mobile US. It's financially difficult for Vodafone to justify absorbing the third player in the US but it would give them the control they never enjoyed with Verizon – and of course the sale has made them fabulously cash-rich.

Vodafone taking on T-Mobile US would then make T-Mobile in Europe much more attractive to AT&T in the musical chairs that is the mobile phone business. Industry expert Nick Foggin believes that AT&T is only interested in a big takeover to expand its interests outside the US.

While the takeover panel announcement wouldn't stop Vodafone from selling individual territories to AT&T, this would not suit either of them. Vodafone may be more interested in the growing developing world, but it has yet to turn this interest into valuable companies.

The European countries AT&T would be interested in are too much of a cash cow for Vodafone. The removal of a major player like T-Mobile would suit the stock market investors who generally see consolidation as A Good Thing and would help justify the value of a premium sale.

A Vodafone takeover would also pose some interesting challenges – not least from the unionisation of T-Mobile and the German government having a stake. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.