It’s been just over a year now since the T-Mobile USA deal went down in regulatory flames, and according to the Wall Street Journal this morning AT&T (NYSE:T, news, filings) may finally be ready to step off the M&A sidelines again, but not on this continent. While it may be nothing more than a trial balloon at this stage, apparently they’re looking at the possibility of buying a European carrier partly as a means of trying out some new pricing and technology approaches.
This is probably an intentional leak by AT&T, testing the waters a bit. I’ve noted many times that valuations across the Atlantic are low enough that eventually consolidation will have to take up the slack. AT&T clearly has the financial firepower to take advantage of various opportunities if they decide to pull the trigger. The geographies mentioned would be the UK, the Netherlands, or Germany, although I’ll bet the rest of western Europe wouldn’t be left out.
The markets think KPN would be the most likely target, with Carlos Slim perhaps getting a quick chance to prove out the unsolicited investment America Movil made in the Dutch incumbent last summer. Such a deal does seem like the easiest move, and Slim could even stay on . Everything Everywhere is also mentioned, but I’m not sure that Orange and DT are ready to exit the UK entirely despite the challenges their joint venture has faced. But I wonder if some of the French competitive providers might also be on the list.
Obviously AT&T would be looking for a wireless opportunity more than wireline, but probably anyone they’d look at would have both in some form. But in that vein, another thought to throw out there is the recent talk of a pan-European infrastructure operator. Might AT&T’s apparent interest in dabbling in European telecom again be part of an attempt to get a slice of such a network sharing pie?