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Can a spectrum sale help AT&T push through T-Mobile deal?

AT&T is stepping up efforts to push through its deal to acquire T-Mobile as scrutiny intensifies, with reports suggesting a possible spectrum sale. 
AT&T has begun negotiating spectrum sales as it looks to help push through its deal to acquire T-Mobile USA, according to published reports. The carrier has approached several smaller wireless carriers such as MetroPCS Communications and Leap Wireless to gauge their interest in acquiring spectrum and subscribers in areas where it will have too much spectrum if the deal goes through. 

?It is a smart move by AT&T to line up agreements that they can highlight for the DOJ and regulators as good faith efforts to proactively address the potential spectrum imbalance after an acquisition,? said Ken Rehbehn, a principal analyst with Yankee Group, Boston.

Opportunity calls
In addition to MetroPCS and Leap Wireless, AT&T has reportedly also reached out to CenturyLink, Dish Network Corp. and Sprint Nextel to find out if they would be interested in buying spectrum.

?This is a great opportunity for MetroPCS, Leap Wireless as well as other operators in the U.S. to boost their spectrum positions in markets where they operate,? Mr. Rehbehn said.

?In a time of high-speed mobile broadband devices driven by iconic devices like the iPhone, spectrum counts,? he said.

Acquiring spectrum from AT&T would also provide the ability for these carriers to offer devices to customers that come with services such as video, gaming and other data-intensive capabilities.

?Without additional spectrum, they are limited to fairly simple voice offerings and today?s consumer wants more,? Mr. Rehbehn said.

The reported moves suggest AT&T is looking to improve the chances that its proposed merger with T-Mobile will be approved.

Research firm Strategy Analytics wrote on its blog that AT&T could be reacting to the co-filing by seven states who joined the Department Of Justice lawsuit recently.

The seven states are California, Illinois, Massachusetts, Pennsylvania, Washington, New York and Ohio.

The company may also be looking to speed up the process so it can negotiate a resolution before the March 20 deadline for enforcing the deal with Deutsche Telekom.

On Sept. 16, the DOJ filed a schedule proposing that all steps be taken to be ready for trial by March 19, 2012.

AT&T is suggesting a completion date of Jan. 16.

The parties are expected to meet today to finalize the schedule.

Earlier this month AT&T, T-Mobile USA and Deutsche Telekom filed a response to the DOJ's suit attempting to block the proposed AT&T, T-Mobile merger. In it, the companies said that merging AT&T and T-Mobile will increase competition, lower prices and free up the spectrum.

The recent reports about possible spectrum sales suggest AT&T is now seeking a more conciliatory path.

However, how much impact selling spectrum will have on the proposed merger is not clear.

?It is possible this will help but the U.S. spectrum picture is very complicated,? Mr. Rehbehn said. ?There are no guarantees as they work their way through a very complex acquisition process. 

?I would be surprised that would make any moves to sell anything without the consent of regulators,? he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York