AT&T could acquire a European carrier as it looks to expand its business overseas, The Wall Street Journal reports. The company is reportedly looking at way in which it can escape the growth constraints in the United States by entering a new wireless market where it can “upgrade technology and rollout more lucrative pricing strategies.”
Although AT&T is only identifying targets at this point, it’s though the company could announce a deal before the end of the year.
AT&T offers the largest 4G network in the United States, and it reportedly feels “constrained” in the domestic market. As such, the company is looking at ways in which it can expand elsewhere, and a possible move to Europe could be on the cards. The company is currently “studying” targets, according to people familiar with the matter, so it could be a while before anything actually happens.
Having said that, sources say that the deal “could come before the end of the year,” suggesting this is a plan AT&T wants to pursue quickly.
One possible target for AT&T is said to be EE, the U.K.’s first 4G provider, which owns Orange and T-Mobile U.K; as well as Royal KPN NV, a Dutch telecommunications company. European carriers have been slow to rollout 4G networks, and AT&T may benefit from its ability to upgrade existing network technology.
As The Journal notes, however, expansion into Europe carrier a big risk. Carriers operate differently there, and they are still largely reliant on text and call fees — whereas in the U.S., carriers are more reliant on data fees. What’s more, it’s a more competitive market in which customers are charged less for large voice, text, and data allowances.
Europe’s wireless landscape is also a lot more fragmented than it is in the U.S., with more than 100 carriers operating across the European Union.
AT&T has attempted to expand its presence in the U.S., with a bid to but T-Mobile USA, the country’s smallest carrier, back in 2011. It would have given the company an additional 33.3 million customers, but AT&T was forced to drop its bid later on when the DOJ said that it would oppose the takeover.
Source: The Wall Street Journal