AT&T eyes up Vodafone for buyout

The US mobile giant is rumoured to be looking for an entrance to the UK market by buying the UK-based firm

AT&T is looking to buy the Vodafone Group in a deal that could see the company spend billions on entering the European market, according to reports.

Citing people familiar with the situation, Bloomberg claimed AT&T is working on plans internally to make a bid next year, although formal negotiations with the UK firm have yet to begin.

The key driver behind the deal is supposedly mobile broadband, which has seen great traction across Europe but failed to capture consumers on the other side of the Atlantic.

As a result, AT&T is also said to be looking at buying UK joint venture EE as an alternative, whose recent successes in 4G has made it a strong player in the mobile broadband market.

If AT&T’s bid was successful, it would create the largest mobile operator globally, with joint sales hitting $250bn, but no deal could be struck until Vodafone completed the sale of its stake in Verizon Wireless, which will see it pocket $130bn.

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Rob Bamforth, principal analyst at Quocirca, claimed it may take some work for a US firm to tackle the issues within the European market, but the appeal to someone like AT&T is clear.

“The European operator market is pretty fragmented, but user requirements are less so,” he said. “Roaming isn’t something we should have to think about and seamless connectivity, especially for our data devices, is what users want. “It is also fundamental for M2M or the ‘internet of things’.”

“[AT&T] could also be better, faster, more pervasive when it comes to 4G. It’s been a bit slow in Europe, overpaying in 3G auctions could be a reason, either financial or just affecting confidence. It looks like an opportunity, but will need serious commitment to sort out cross country challenges.”

We contacted AT&T but the company refused to comment on the rumours. Vodafone had yet to return our request at the time of publication.

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