Verizon Chief Says AT&T’s Bid for T-Mobile ‘Had to Occur’

Verizon Communications Inc. Chief Executive Officer Lowell McAdam said AT&T Inc.’s proposed acquisition of T-Mobile USA Inc. “had to occur” as mobile-phone carriers use more wireless spectrum.

“The AT&T merger with T-Mobile is kind of like gravity, it had to occur,” McAdam said at an event in New York today. If the government wants to stop the takeover, it needs to have a plan to distribute spectrum and ease the crunch some carriers are facing, he said. “We’re going to watch that very closely.”

The U.S. Justice Department on Aug. 31 sued to block the proposed $39 billion acquisition of T-Mobile USA, calling it a threat to wireless competition. AT&T has said it struck the deal in part to gain the capacity it needs to ease network congestion, and accelerate the rollout of faster, next-generation network technology.

Carriers have called on the government to free more airwaves as the use of smartphones increases. More Americans will surf the Web from mobile phones and other wireless devices than from desktop computers and other fixed-line devices by 2015, market researcher IDC said this month.

“If you look at the path that wireless is on, clearly we need to have more spectrum in the marketplace,” McAdam said.

McAdam also said Verizon Wireless, the mobile-phone carrier it co-owns with Vodafone Group Plc, will pay dividends if it doesn’t need its cash for other purposes, such as spectrum purchases.

“When it makes sense, we’ll have a dividend,” McAdam said. “When there’s a better first use for those dollars, we’ll do that. The key is, for us, that Verizon gets to make that decision.”

Verizon fell 57 cents to $35.84 at 4 p.m. in New York Stock Exchange composite trading. The shares are little changed this year.

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