AT&T Chief disputes higher prices after T-Mobile deal

NEW YORK Wed Mar 30, 2011 7:53pm EDT

AT&T Inc. Chief Executive Officer Randall Stephenson announces his company's proposal to buy T-Mobile from Deutsche Telekom in New York, March 21, 2011. REUTERS/Brendan McDermid

AT&T Inc. Chief Executive Officer Randall Stephenson announces his company's proposal to buy T-Mobile from Deutsche Telekom in New York, March 21, 2011.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - AT&T Inc (T.N) Chief Executive Randall Stephenson disputed the commonly held belief that consumer bills would rise if there were fewer competitors in the U.S. wireless market.

AT&T's defense comes as it girds for a tough regulatory review of its $39 billion deal to snap up Deutsche Telekom AG's (DTEGn.DE) T-Mobile USA, the No. 4 U.S. mobile operator known for its lower prices. The deal would create a new industry leader. The combined company and Verizon Wireless, the current largest U.S. provider, would hold nearly 80 percent of the market.

Stephenson, who spoke to a New York event sponsored by the Council on Foreign Relations on Wednesday, referred to a government report that showed prices on average fell 50 percent over the last decade despite five wireless mergers over the period.

Concerns over surrendering too much control to few players prompted New York Attorney General to conduct a thorough review of the deal.

Asked in an interview with Reuters global editor-at-large Chrystia Freeland about the need for price restrictions as a condition to garner regulatory approval, Stephenson said, "I'm not sure of the relevance of it.

The U.S. market "is the most highly competitive in the world."

Stephenson said AT&T consumers once paid around $1.90 per megabyte of wireless data and now pay around 16 cents.

The benefits of the merger would be nearly immediate, he said. In New York, where users of the Apple (AAPL.O) iPhone have complained about dropped calls and slow wireless data speeds in certain areas, capacity would rise by 30 percent.

AT&T expects the acquisition to raise its infrastructure spending by $8 billion over a seven year period.

Among other benefits of the deal, Stephenson said AT&T also planned to work with Deutsche Telekom on lowering roaming charge costs, which cellphone users are required to pay when using their phones outside of the subscriber's market.

Shares of AT&T traded up 73 cents, or 2.4 percent, to $30.78 on the New York Stock Exchange.

(Reporting by Kenneth Li, editing by Dave Zimmerman)

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Comments (2)
whom-do-you wrote:
So let me get this straight – will the ATT Chief be willing to sign off that he will foot any surplus on my bills and those of the other T-Mobile customers if
1. their plan remains relatively the same when moving to ATT
2. and the cost of said plan increases?

Sincerely.

Mar 30, 2011 6:02pm EDT  --  Report as abuse
bebs wrote:
Well, he may be right that we will see the impact on our bills on the short run, but ont he long run we will face an oligopoly.

Anti-trust folks are heading for quite a job on their plate after the oligopoly has materialized.

Mar 31, 2011 8:47am EDT  --  Report as abuse
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