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Press Narrative Continues That AT&T Must Buy...Somebody
AT&T's Supposed Spectrum Crunch Still Fictional
by Karl Bode 12:56PM Friday Dec 30 2011
The AT&T T-Mobile deal was shot down in large part because AT&T's claims that they needed T-Mobile assets to deliver LTE to 97% to the country simply weren't true. With the Qualcomm deal AT&T squats on more wireless spectrum than anyone (sans perhaps Verizon and their new SpectrumCO acquisitions) and certainly has the resources needed to deliver a cutting edge LTE network to the entire country. The problem is AT&T -- a company that repeatedly puts investor returns above the consumer and and network health -- loves to cut corners (read: cake, eat it too).
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Despite their claims that they needed T-Mobile spectrum being complete bunk, the company has convinced the press and Wall Street analysts (the latter eager for less competition, higher rates, and better quarterly returns) to continue the narrative that gosh -- AT&T just needs to buy somebody. JPMorgan analyst Phil Cusick gets Bloomberg to continue beating the AT&T acquisition drum, claiming AT&T needs to buy Leap or MetroPCS because, well -- just because:
Leap Wireless International Inc. and MetroPCS Communications Inc. may be takeover targets for bigger rivals AT&T Inc. or T-Mobile USA after the larger companies’ $39 billion merger plan collapsed, JPMorgan Chase & Co said. The pay-as-you-go carriers could be suitable “near-term” sources of spectrum for a buyer, Phil Cusick, a JPMorgan analyst in New York, said in a note to clients today. AT&T cited a need for more spectrum as a reason for its attempt to buy T-Mobile.
While pumping Leap and MetroPCS stock, Cusick forgets to mention that AT&T's own documents indicate they have adequate spectrum and asset resources and don't need to buy anyone. The recent Qualcomm deal also gives them some additional wiggle room, though that unpaired spectrum won't be fully utilized until LTE-Advanced supplemental downlink carrier aggregation technology evolves. Either way, AT&T needs to buy another company at this point like the Kardiashian family needs shoes.

During T-Mobile deal hearings it was repeatedly illustrated that any AT&T capacity crunches are of their own design, due in part to the fact that AT&T doesn't efficiently use the resources they already have. The reality is AT&T (and Verizon) very often squat on spectrum to prevent competitors from entering the marketplace, but that's a market reality that the press and most Wall Street analysts (much to AT&T's pleasure) choose to repeatedly ignore. The former is often just lazy and blinded by AT&T talking points, while the latter enjoys using investor notes to make stocks jump on command.

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Cleveland, OH

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reply to tmc8080

Re: Karl strikes again

Communist and/or socialist Canada? Half the time I can't tell if you guys are trolling or legitimately insane/utterly devoid of historical knowledge or context.