AT&T’s planned acquisition of T-Mobile will leave T-Mobile owner Deutsche Telecom with a seat on the AT&T board and an 8% ownership stake. That’s a reality that could have implications beyond the wireless side of the business, as both carriers are the incumbent international long-distance providers in their respective markets and are strong competitors in the multinational business services market.
In an email to Connected Planet, Analysys Mason analyst Steve Hilton noted that AT&T’s strategic business services revenue in 2010 was $4.7 billion while DT, which provides business services through its T-Systems unit, saw 2009 revenues of $12.5 billion for that unit.
The multinational market is already characterized by what some people call “co-opetition”—with carriers bidding against each other one day and supplying one another the next. Because of, or perhaps more accurately in spite of that, some carriers have tried, from time to time, to partner up in pursuit of multinational corporations—but without a lot of success.
AT&T, for example, previously created a joint venture with British Telecom called Concert that promptly unraveled—in large part pundits said, because of a culture clash and burdensome organizational structure
The new situation that AT&T faces with DT is considerably different. The partners may still see some culture clash, but organizationally they will still remain two separate companies.
Potentially the benefits could outweigh the downside. In a recent press conference, AT&T’s CEO said he anticipated preferential deals for enterprise data between the two companies just as AT&T works closely with America Movile (in which it has an investment stake) today.
All of this, of course, assumes the AT&T/ T-Mobile deal goes through. According to The Wall Street Journal, an unnamed FCC official said the deal faces a “steep climb.”