Thursday, December 1, 2011

AT&T Mulls Joint Venture With T-Mobile USA as Fallback Position

AT&T and Deutsche Telekom may go for a joint ventureAT&T and Deutsche Telekom, the parent of T-Mobile USA, have discussed an alternative transaction, forming a joint venture that would pool network assets from the two U.S. wireless carriers, as a potential alternative plan if their current acquisition deal falls apart, the Wall Street Journal reports. 

But it isn't clear that the talks are active. "There are currently no talks about a (network sharing) joint venture," Reuters reports. "This would signal that they have given up. This is not the case, we're still betting on victory, not on the second-best solution," Reuters reports a source has said. 

At least in principle, such a move could create a sort of functional separation between AT&T and T-Mobile USA retail operations and the networks on which those services are provided. Such infrastructure sharing deals have grown more common, as mobile service providers agree to share tower sites and radio facilities as a way of reducing capital investment for new networks. AT&T Mulls Joint Venture With T-Mobile

The possible infrastructure joint venture would have a different business driver, namely allowing each firm to better use their shared spectrum and radio network. In such a deal AT&T would not have to worry about antitrust concerns, as the two firms would separately maintain their distinct retail customer bases and operations. 

On the other hand, such a deal could complicate any future efforts by T-Mobile USA to sell itself outright. 

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