Feeds

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

Does that make T-Mobile a target?

  • alert
  • submit to reddit

Maximizing your infrastructure through virtualization

+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. ®

Eight steps to building an HP BladeSystem

More from The Register

next story
Doctor Who season eight scripts leak online
BBC asks fans to EXTERMINATE copies before they materialise
Star Wars: These are the 'unknown' actors we were looking for
Pip Andersen and Crystal Clarke plucked from (relative) obscurity
Report: UK.gov wants to legislate on comms data BEFORE next election
Ministerial alarm sets in over EU court's data retention ruling
ICO probes BBC after secret British army unit's info LEAKED
Panorama in the brown and smelly after losing confidential data
Analyst: Chinese buyers shunning IBM, EMC, Oracle and Cisco
Government nudging locals towards home-grown kit when possible
Tesla trademark spat threatens Musk's China dream
Wheels will come off electric motor biz if Chinese bloke wins court fight
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
The Power of One eBook: Top reasons to choose HP BladeSystem
Only the Power of One delivers leading infrastructure convergence, availability and scalability with federation, and agility through data center automation.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.
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.