AT&T: Telecom consolidation 'logical,' inevitable

Speaking at a Nomura investment conference, AT&T CFO John Stephens said the wireless industry is likely to shrink down to two or three players, roughly half the roster across the U.S. today.

“I think it is just logical that the industry is going to consolidate in some form or fashion. I think the marketplace has spoken to that with what it has done to pricing in the valuations on some of the companies. From an economic perspective and a highly CapEx-intensive business, I think it is logical to assume you’re going to have two or three and certainly not six and seven competitors in any marketplace. So I think consolidation is logical,” he said. “Will the government allow it to happen? They have certainly spoken to us on that as a participant in that from acquiring spectrum and more customers. They spoke to us last year. Whether they will let it go at other levels or at a lower level or smaller deals, we will leave that to the FCC.” The argument from Stephens rhymes with what is usually heard from the airline industry. The theory: There can only be a few players given the high costs. In the wireless industry, spectrum is limited and it’s not cheap to build out a network.