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Mobile Leadership Strategies

AT&T Eyes the European Market

Daily Insight | Declan Lonergan | January 17, 2013

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With Verizon still dominating and little opportunity for expansion within the U.S. market, No. 2 mobile carrier AT&T is setting its sights across the Atlantic Ocean as it mulls the possibility of mergers and acquisitions in Europe.

 

The Wall Street Journal recently reported that AT&T is currently investigating targets within the European market. The company views Europe as a region where it can expand by entering the market and then rolling out network and technology upgrades and installing profitable pricing strategies. Specific countries AT&T may target include the U.K., Germany and the Netherlands, the news provider noted.

 

But such a move would not be without its challenges. For one, Europe’s mobile broadband market is no less competitive than that of the U.S., and acquiring an international partner means having to deal with possibly multiple new regulatory bodies.

 

Yankee Group Vice President of Research Declan Lonergan comments

 

“There are a million reasons why this looks like a bad idea, and only one why it just might make sense. On the negative side of the equation, take your pick from these: Europe’s ongoing economic difficulties, tough telecom industry regulators, saturated mobile markets, fiercely competitive local markets, limited cross-border consolidation opportunities, 4G networks requiring significant upgrades and investments. It’s a long list.

 

However, on the positive side, there is one factor that AT&T might just be considering: in Europe, things can only get better! This region once led the rest of the world in mobile communications. It also used to have pretty decent economies, driven by the prospect of closer EU integration and a common market.

 

Though it’s hard to see an upturn right now, there is no doubt Europe’s economies and its telecommunications industry will eventually turn the corner. The relentless cutbacks in consumer spending that have been an unwelcome but inevitable feature of recent years will eventually give way to renewed consumer confidence. When that happens, Europe’s mobile operators will be well positioned to benefit, and particularly so once they have completed their 4G/LTE network deployments. For large numbers of European citizens and business owners, the future may not appear particularly bright right now, but things will eventually get better. The question is: When that happens, which side of the pond will AT&T be watching from?”

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