AT&T Is Giving Up on Europe for Now
AT&T (NYSE:T) has given up on plans to purchase assets belonging to the British telecom company Vodafone (NASDAQ:VOD) — at least for the moment. In a statement filed with the UK’s Panel on Takeovers and Mergers on Monday, AT&T said that, “At the request of the UK Takeover Panel, AT&T confirms that it does not intend to make an offer for Vodafone.” Now, AT&T is prohibited from making an offer for Vodafone within six months of making the announcement.
Rumors first surfaced that AT&T was interested in Vodafone back in the fall, when it was announced that Vodafone was selling its 45 percent stake in Verizon Wireless to Verizon Communications (NYSE:VZ). Then at the end of September, AT&T CEO Randall Stephenson told investors that he doesn’t believe U.S. regulators will allow any further consolidation in the U.S. wireless industry and that the company was interested in exploring options in Europe.
Europe is an appealing place for telecom companies at the moment because 4G networks are beginning to be built there to provide Europeans with the same fast network service that is already common in America, and the European economy is showing signs of recovery. But there are several obstacles to AT&T’s plans to invest there.
The European telecom industry is faced with ever changing and confusing regulations. The National Security Agency scandal from earlier this summer has left a bad taste in the mouth of Europeans, who weren’t happy to find out they were being spied on by the NSA. Concerns about surveillance by the U.S. government may put a stop to European expansion for American telecom companies.