DoJ presses ‘pause’ on $85bn AT&T/Time Warner merger plan
08 December 2017 | Alan Burkitt-Gray
AT&T’s proposed $85 billion acquisition of Time Warner is unlikely to be complete before June or July next year – even if it does go ahead.
The US Department of Justice (DoJ) is responsible for the further delay to a deal announced 14 months ago and originally due to be complete in October 2017.
Lawyers have put back the start of a court battle over the DoJ’s case from 20 February 2018 to 19 March. Originally the DoJ wanted the case to start on 7 May – so the new date is a compromise.
When the 20 February date was set, lawyers said the hearing would take 10 working days, but no new estimate has been offered.
But the judge, Richard Leon, said yesterday that he would rule on the case in late April or May – well past AT&T’s current target completion date of 22 April. He said the companies should push the date back by two or three months – implying 22 June or even 22 July.
And that’s assuming the DoJ loses the case. If it wins, the deal will be off – or at least postponed still further while AT&T takes the decision to appeal.
Meanwhile at the UBS Global Media and Communications Conference this week AT&T’s CFO John Stephens said the company will expand its high-speed internet reach in the US.
AT&T now markets its 100% fibre network to 7 million customer locations in 62 markets, he said. Across the company’s fibre footprint, penetration rates are in the mid-30% range, and penetration is closer to 50% in markets in which fibre has been marketed for 24 months or more, he told investors.
Stephens reiterated the company’s longer-term plan to cover more than 50 million locations with high-speed internet. The company expects to accomplish this while maintaining capital expenditures at a rate of 15% of service revenues or lower, he said.
Cost savings enabled by the company’s network virtualisation initiative may enable AT&T to keep capital expenditures below 15%.
In Mexico, AT&T plans to complete the buildout of its 4G LTE network to 100 million people and expects EBITDA and operating income from Mexico wireless operations to improve in 2018.
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