Both companies announced the completed transaction Friday, less than a week after a federal judge dismissed an antitrust lawsuit from the U.S. Department of Justice. Experts call the deal a “vertical merger,” which aligns companies from different locations on the supply chain and on paper does not pose an unfair disadvantage to either company’s competitors.
ARS Technica reports that AT&T will consider additional acquisitions in the area of advertising.
“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” CEO Randall Stephenson said at the close of the Time Warner merger.
The AT&T-Time Warner deal for now appears to mainly affect direct-to-consumer entertainment options. We’re seeing a similar move in Comcast, which has bid $65 billion for 21st Century Fox (currently beating out the reported $52.4 bid of Disney). The Time Warner acquisition has helped pressure on service providers to purchase their own media content, but the lasting impact of the deal on the business-to-business technology space may be the number of carriers that try to match AT&T with acquisitions of their own.
Sprint and T-Mobile immediately come to mind. The two companies reportedly sent the Federal Communications Commission an official merger application today. Sprint and T-Mobile announced the $26 billion deal April 29. They are the third and fourth largest carriers in the U.S. and together would pull their resources to stay on level footing with AT&T and Verizon. They would operate under the T-Mobile brand.
While Reuters reports the Department of Justice has been interviewing smaller carriers about the competitive impact this transaction may have, T-Mobile and Sprint see it as a necessary step to force AT&T and Verizon to offer competitive pricing and innovation.
The combined 5G network of the two companies is one of their biggest selling points. Sprint CEO Marcelo Claure said the expanded 5G capabilities will create a “hotbed for…