AT&T "Open" to European Acquisitions

Major bouts of communications industry consolidation tend to occur in waves, often when regulatory and financial conditions are favorable, and when major competitors make major moves that realign market share. 

Some would say European regulators are signaling receptivity to more mergers, financial markets are signaling that money is available, and Verizon and Vodafone have made the first big move.

In the U.S. market, Sprint and T-Mobile US have made significant moves, though AT&T has been denied the chance to make a move of its own in the domestic market. That only makes European or other acquisitions more attractive, as expansion on a major scale among the four leading national mobile suppliers seems unfavorable, on the regulatory front. 

AT&T CEO Randall Stephenson also notes that Verizon's recent ability to sell $49 billion in bonds, to help fund its purchase of the balance of Vodafone's stake in Verizon Wireless that Verizon did not already own, shows there is capital available to fuel acquisitions. 

The bond offering was "eye opening," Stephenson said. "It allows you to think differently about things, different than you might have thought three weeks ago."

Some might look at revenue trends in the European mobile market and see weakness, as revenue seems to decline every year. But AT&T believes it could reverse that trend by investing more in Long Term Evolution 4G networks and thereby raise revenue, as it has seen is possible in the U.S. market. 

Major acquisition windows that rearrange markets do not open very often. When they do open, contestants need to move before the windows close again, as they will.

Separately, Telefonica will boost its stake in Telco, the holding company that controls Telecom Italia, to an initial 65 percent with an option to bring the stake to around 70 percent, according to Reuters.

Telefonica already own 46 percent of Telco, representing in turn about 10 percent of Telecom Italia shares. Telefonica says It will boost its stake in the Telecom Italia to nearly 16 percent.

Telefonica is set to acquire its additional shares from the other Telco shareholders, including Italian banks Mediobanca, Intesa Sanpaolo,  and insurer Generali.

That move might well be viewed as part of a coming merger wave in the European telecom market.