With Vodafone keen to swap assets for cash, AT&T is interested in seeing what it might walk away with.
Vodafone confirmed Aug. 29 that it's in negotiations with Verizon Communications to sell the latter its 45 percent stake in their joint venture. When the pair is through, AT&T plans to "examine [Vodafone's] remaining assets," Reuters reported Aug. 30, citing people familiar with the matter.
The report added that AT&T is only interested in wireless assets and "would be discouraged if Vodafone expands in cable and fixed line."
Verizon has reportedly been trying for years to acquire complete control of its wireless business. In April, there were rumors that AT&T would play a role in that. The Financial Times blog reported April 2 that AT&T and Verizon were putting together a bid to buy Vodafone in which Verizon would acquire Vodafone's 45 percent stake in Verizon Wireless and AT&T would acquire Vodafone's extensive business holdings outside the United States. The deal was said to have the potential to be the largest merger and acquisition deal on record.
Verizon is said to be currently negotiating with Vodafone at a price point around $130 billion, according to Reuters.
Full control of Verizon Wireless would enable Verizon to be more nimble and responsive in a more competitive market than it has been in years. While Verizon and AT&T have dominated, number-three carrier Sprint has a new influx of cash, from its merger deal with Softbank this summer, and T-Mobile, newly merged with MetroPCS, is showing a feistiness—shedding two-year contracts, making it easier to upgrade devices more frequently—that consumers are responding to positively.
As Verizon works to keep growing its bottom line, it's also considering a move into Canada. In June, it was said to be considering an acquisition of Wind Mobile.
"We're looking at the opportunity. This is just us dipping our toe in the water," Verizon Chief Financial Officer Fran Shammo told The Wall Street Journal June 18.
If AT&T has no involvement in Verizon's Vodafone deal, Canada might be where it looks next.
"If Verizon starts moving to become a national player in Canada, AT&T would do something similar," Gartner analyst Bill Menezes told eWEEK Aug. 29. "The Canadian market is significantly smaller than in the U.S., but there are still opportunities there to grab competitive market share to grow economies of scale."
However, some analysts believe that talk of buying Wind may have "just been a bargaining chip against Vodafone," Canada's The Globe and Mail reported Aug. 30.
Though Tim Casey, an analyst with BMO Nesbitt Burns, told The Globe and Mail that it appears that Verizon has the "financial scale to pursue both opportunities" and that Verizon is likely to submit an initial (refundable) deposit to participate in an upcoming 700MHz spectrum auction.