AT&T’s proposed $85 billion acquisition of Time Warner would combine a telecom giant with a media behemoth — giving the wireless company and Internet provider ownership of CNN, HBO, Warner Bros. and other media properties, in addition to the previously acquired DirecTV.
So where does this leave T-Mobile? Could it cause the smaller wireless company to get bundled up in a similar merger of its own? John Legere, the CEO of the fast-growing wireless company, was asked about the implications of the AT&T and Time Warner deal during his company’s earnings conference call this morning, after T-Mobile reported steady growth in subscribers, profit and revenue.
Previously: T-Mobile adds 2M customers, reports $366M profit as AT&T and Verizon pursue big deals
Legere acknowledged the consolidation trend among media and telecom companies but indicated that T-Mobile’s biggest opportunity in the short run is to continue acquiring companies in the wireless industry. “The great news is that (AT&T is) going to be further defocused than they are now, and the upside opportunity to continue to acquire businesses in this space for us is tremendous,” he said.
He also gave what seemed like a preview of T-Mobile’s potential case to regulators reviewing the deal. “AT&T may end up being a provider to us of content, as opposed to anybody thinking that there is any possibility that they will exclusively use that content. I think that will be sorted out in Washington.”
And as someone who famously identifies with Batman, he joked about one of the divestitures he would want as a condition. “I also would promote to Washington that they should significantly consider making AT&T divest Batman. I think there’s no way that AT&T should own Batman.”
Here’s our edited transcript of Legere’s comments.
First of all, it’s clearly a very exciting deal, and I’ve spent most of the weekend looking at it, as you have. It’s a bold move. Certainly a long road to go before it’s completed. Couple things: They also announced their earnings for Q3, and if you look and you compare and contrast their earnings with ours, you understand why they are trying to do a vertical integration, which is in effect investing in new businesses and revenue streams as opposed to something with synergies. What yelled loudly in their results was, when you normalize, they lost 354,000 postpaid customers, at a time when we’re certainly adding many. … The great news is that they’re going to be further defocused than they are now, and the upside opportunity to continue to acquire businesses in this space for us is tremendous.
Second thing is that there is a piece of an industry of the future that they are attempting to define. … (AT&T CEO Randall Stephenson) used something along the lines of, “mobile is going video and video is going mobile.” … What we’ve been saying all along is, all content is going to the Internet, and all Internet is going mobile. And the future of getting the now 70 million and growing people who have mobile devices with T-Mobile complete ubiquitous access to all the content they want in an easy and convenient way. We have many paths forward to that. Binge On and T-Mobile One are a start. Potentially over time, even ourselves becoming an aggregator of aggregators — an aggregator of content and indexing of what’s there.
AT&T may end up being a provider to us of content, as opposed to anybody thinking that there is any possibility that they will exclusively use that content. I think that will be sorted out in Washington. I also would promote to Washington that they should significantly consider making AT&T divest Batman. I think there’s no way that AT&T should own Batman. And then lastly … customers are going to drive everybody’s desire to have ubiquitous access on all devices, including the home, which I think is going to cause all sorts of consolidation between cable providers, broadband providers, wireless providers and content. … It’s going to cause some acceleration. It’s a very fast move. It’s very good for T-Mobile in the short and medium term, and it highlights the key opportunities we have as a company.
