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February 26, 2013 7:19 pm
With political deadlock in Italy triggering fresh concerns about the eurozone economies, few chief executives would consider Europe a growth opportunity just waiting to be seized.
Not so Randall Stephenson, chief executive of AT&T, the biggest US telecoms operator, who told the Financial Times that he anticipates a “mobile internet revolution” in Europe, which has lagged behind the US in adopting faster mobile internet technologies.
“I’m more convinced than ever that the US model, in spite of a lot of concerns about the regulatory climate and spectrum policy, will be replicated here,” Mr Stephenson said at the Mobile World Congress trade show in Barcelona.
“The mobile internet revolution will take off to the same extent that it has in the US and, if you believe that, and I do, then [the question is]: how can you participate?”
While AT&T and Verizon dominate a nationwide market of 314m people in the US, in Europe the telecoms market is much more fragmented, with dozens of separate national regulators managing separate auctions for the airwaves needed for 4G mobile internet services.
Neelie Kroes, Europe’s digital commissioner, on Tuesday pledged to use EU treaty powers to force through plans to create a single market for mobile services across the region.
Unlike Carlos Slim, the Mexican telecoms entrepreneur who invested $1bn in stakes in Telekom Austria and KPN, the Dutch operator, Mr Stephenson indicated that mergers and acquisitions were not necessarily at the top of his list.
“There are a broad array of options and opportunities to take in Europe, it’s not just M&A,” he said. “The place most people’s minds go to immediately is, you go buy something. I don’t know, maybe that is the case, but that isn’t where your head should immediately go.”
Mr Stephenson suggested AT&T might choose to license some of its new services such as the connected car or home security services to European operators. Once European and US telecoms operators share the same 4G LTE technology, Mr Stephenson suggested that other cross-border opportunities could open up, such as arrangements to lower international data roaming charges.
He also expressed confidence about growth in the company’s US businesses, noting that revenues from fixed-line residential services, which had been falling for several years, grew by 3 per cent in the fourth quarter, driven by new fibre-optic services. “I am really energised by this,” he said.
Mr Stephenson praised regulators in the US for moving quickly to approve a series of spectrum acquisitions that AT&T has made since the company abandoned its $39bn bid for Deutsche Telekom’s T-Mobile USA unit 14 months ago. Since then, he said, AT&T had conducted 101 separate transactions.
However, like his counterparts in Europe, he also highlighted the huge investments needed to upgrade network infrastructure to LTE, and called for lower taxes to encourage capital spending.
“Policy makers are going to have to be very clear about the desired outcomes; whether they desire rapid adoption of the latest technologies and capabilities as well as the downstream economic multipliers that come from that, or do they desire hyper-competition and the lowest prices possible for the most basic of services.
He said: “The challenge for policy makers and those in this industry is to get the critical components right: the spectrum policy, the capital investment policy and fiscal policies needed to foster innovation in the ecosystem.
“I look at these as all very closely related . . . they are all part of a three-legged stool. If you don’t get one right, the stool will tip over.”
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