NEW YORK – Telecommunications companies need to combine to compete in a market that requires advanced technology to support mobile devices, Julie Richardson, managing director at Providence Equity Partners Inc., said Wednesday.
“It’s pretty clear what the end game is in wireless,” Richardson said at the Bloomberg Dealmakers Summit in New York. “LTE, 4G — you have to have those services to compete. One of the most interesting things to watch in telecom will be these players coming together.”
Carriers have sought deals and called on the government to open up more airwaves as the use of smartphones increases. More Americans will surf the Web from mobile phones and other wireless devices than from desktop computers and other fixed-line devices by 2015, market researcher IDC said this month.
AT&T Inc., which is working to rescue a $39 billion bid for Bonn-based Deutsche Telekom AG’s T-Mobile unit from antitrust regulation, has said it struck the deal in part to gain the capacity it needs to ease network congestion and accelerate the introduction of faster, next-generation network technology.
Only AT&T and Verizon Communications Inc. have the resources to support a national 4G Long Term Evolution network, Richardson said. Sprint Nextel Corp., the third-biggest U.S. wireless operator, is struggling to compete against larger rivals and has lost money for 15 consecutive quarters.
Sprint Seeks Cable
Sprint, based in Overland Park, Kan., is in discussions with cable companies, including Comcast Corp. and Time Warner Cable Inc., about an investment in the company, three people familiar with the situation said last month.
Dish Network Corp., the second-largest U.S. satellite-TV provider, may consider forming a partnership with or buying a wireless carrier such as Sprint or Clearwire Corp., Chief Executive Officer Joseph Clayton said this week.
There are no stable wireless operators available for cable companies to purchase, Richardson said.
“There is the perpetual question, will Comcast or one of the other cable companies step up?” she asked. “They won’t. It’s not really a priority at this point.”
Richardson spoke on a panel with Laurence Grafstein, the managing director and co-head of mergers and acquisitions at Rothschild North America Inc.; Scott Sperling, co-president of private-equity firm Thomas H. Lee Partners; and Joseph Simons, a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP and a former chief antitrust enforcer at the Federal Trade Commission.
