AT&T Likely to Enter European Market

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Sept. 13 (Bloomberg) -- Bloomberg’s Matthew Campbell reports on AT&T’s possible entrance into the European market and how other telecom companies are reacting. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Doing in anticipation of a possible arrival of at&t? they are changing the way they are thinking about the telecommunications sector.

For a long time and i'm a --, there was a lot of push towards selling assets, shrinking, reducing your footprint to its core.

That seems to be slowing down or even stopping as the of orange, telefonica look around and say, we may have this gigantic new competitor knocking on our door.

Maybe we do need scale.

Most concretely, what this is -- the way this is taking shape, everything everywhere was going to get sold.

It looks like that has been shelved or is slowing down for now.

Cracks -- what is attracting foreign buyers to europe?

We already have carlos slim invested in the european telecoms face.

Cracks there are two factors -- direct two factors here.

If you do want to play in the sector, now is the time to do it.

While europe was quite advanced in signing up to three g , on 4g, we are way behind.

The u.s. and asia have been much quicker and adoption.

If you have a the sis as at&t does, you can drive investment and adoption of these high-value mobile services.

Europe is low hanging fruit.

Cracks a number of these -- do they have the financial capacity to go out and do deals of the run?

That is the $100 billion question.

Telecom would love to make deals in emerging markets like sub- saharan africa.

That is constrained.

Telecom italia is carrying enormous debt.

All of these firms do face a real balancing act.

One of the m&a stories we have seen developing has been vodafone buying up kabel deutschland.

That looked as if it was being held up by hedge fund investors for a while.

Is that a done deal now?

Vodafone seems to have pulled this out of the fire.

There was a threat from an activist american hedge fund that would've taken advantage of an odd german takeover law to squeeze vodafone for more money.

Vodafone did yesterday announced they have exceeded the 75% threshold and accepted -- of acceptance they need to absorb and consolidate kabel deutschland.

Barring some surprise, this is more like a done deal.

How does absorbing kabel deutschland help vodafone?

We are all talking about increasingly mobile.

Here, you have a mobile business that wants to be more attached to the ground.

This is a bit of a shift in thinking.

This is a new thing.

It is new for a lot of telecommunications firms.

There are two reasons why mobile firms would want fixed line assets.

Number one is churned.

If you can sell packages where you have home and mobile broadband all from the same provider, you are less likely to switch.

The other reason is somewhat more technical.


As we watch videos on youtube on our phone, that puts huge strain on the network.

It is less strain if you can move it through the ground.

Vodafone has two options.

They can rent that capacity in the ground from the incumbent.

Or they can buy or build it themselves.

More are making the choice to buy or build.

Thank you very much.

Matt campbell joining me to talk about european telecom.

Coming up, syria has agreed to

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