AT&T-Vodafone hookup may revolutionize roaming

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AT&T Vodafone Acquisition Analysis

AT&T

If the AT&T-Verizon takeover of Vodafone actually goes through, it might represent an earthquake in mobile roaming. AT&T’s (T) acquisition of Vodafone’s portfolio of carriers would mean that it would be able to offer American customers new roaming prices not only to major European tourist and business travel targets like the U.K., Germany and Italy, but also popular international destinations like Australia, Turkey, South Africa and Egypt. The old Vodafone-Verizon (VZ) alliance always had a major stumbling block that prevented effective roaming: The lack of a wide range of mobile phones that would have supported the different W-CDMA and CDMA2000 technologies the two carriers employed.

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In contrast, AT&T and Vodafone both use similar GSM-GPRS-EDGE-W-CDMA-LTE upgrade pathways, though on different bands. The original AT&T W-CDMA networks were built with 850 MHz and 1900 MHz frequencies, while Vodafone’s European networks mostly with 800 MHz and 1900 MHz. However, this difference has started to matter less and less as key smartphone vendors roll out models with chipsets supporting an extensive range of bands. The iPhone 4S already featured quad-band GSM and quad-band W-CDMA support.

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From this perspective, AT&T’s acquisition of Vodafone’s international properties would have made far less sense four years ago. But right now, quad-band 2G and 3G support is becoming the norm even in mid-range smartphones, opening the door for global roaming system that could offer cheap terms with existing handsets. This might enable AT&T to court corporate customers even more aggressively.

The two leading carriers have already had notable success in marginalizing Sprint (S) in the enterprise competition. Acquiring Vodafone’s global empire could give AT&T a lethal weapon to wield against Sprint and T-Mobile when it comes to competing for high-end consumers.

Why would Verizon agree to an arrangement that would seem to give AT&T a unique opening in transforming itself to a global giant? That is the key question today. Gaining total control of Verizon hardly seems like a glittering prize when you compare that to how much AT&T has to gain.


This article was originally published on BGR.com

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