Speaking at a Goldman Sachs investor conference, Verizon CEO Lowell McAdam suggested that the government either needs to allow the T-Mobile and AT&T merger to go through or figure out a way to provide more spectrum to the telecom industry.
Though Verizon Wireless is holding off officially endorsing the proposed merger until they learn the outcome of the court case and how it will impact Verizon, the following statement clearly suggests Verizon will support the merger.
AT&T buying T-Mobile is like gravity. It had to occur. T-Mobile has spectrum, but no capital. And AT&T has the capital, but needs the spectrum. If the government wants to stop this merger, it needs to get more spectrum out on the market.Lowell McAdamVerizon Wireless
We sense there’s an ulterior motive here, as an approval of the AT&T-Mobile deal would open up the doors for Verizon to make some strategic acquisitions of its own. Sascha Segan from PCMag said it best:
Verizon supports ATT-Mobile merger because if it doesn't go through, VZ won't be allowed to buy other major carriers either.Sascha SeganPCMag
Regardless of their motives, we tend to agree with Verizon’s claim that the telecom industry needs more spectrum if it is to serve the needs of the entire population. If the government is unwilling to provide this spectrum to telecom companies, then a deal between AT&T and T-Mobile makes sense. T-Mobile has the spectrum that AT&T needs to build out their network, and T-Mobile simply doesn’t have the capital to build it out themselves. For now, we’ll just have to sit back and see what happens.
What do you guys think? Should the merger be allowed to go through, or should big government figure out a way to provide additional spectrum to the telecom industry (or both)?