Cellular Colonialism
By Carlo Longino, Mon Feb 02 19:00:00 GMT 2004

At least two international carriers are weighing bids for AT&T Wireless, but do they stand to gain from such an acquisition?


Vodafone and NTT DoCoMo are rumored to be considering bids for the US carrier, looking to add a US carrier to their stable because they see it as a good fit into their international plans. Vodafone has built an extensive global network and made the ease with which its users can roam a key offering, something that their current stake in US CDMA carrier Verizon doesn't allow.

And while analysts may talk up the synergies and economies of scale these two big carriers could leverage to lower costs in a US operation, that may be little more than hype. AT&T (like all US carriers) operates on two completely separate frequencies than Europe or Japan, requiring different network equipment than the rest of the world, and GSM handsets are again taking a divergent path, with many new Americas models sacrificing 900 mHz support for the 850 band.

To a further extent, integrating operations in Europe may be much easier, given the shorter geographic and cultural distances, than working in a US operation. T-Mobile's US unit, for instance, remains quite a separate operation from its European brethren. And as for importing their "know-how" to the US to push mobile data, ask DoCoMo how that went for them at AT&T, whose supposedly i-mode inspired mMode offering hasn't been exactly overwhelming.

So if the battle's bottom line is over who gets to serve frequent travelers -- be they from the US to Europe, or vice versa. But is this worth it? Trans-atlantic roaming rates are still high enough (even on an international carrier like T-Mobile) that they don't attract many casual users, leaving the carriers sweating over a relatively small number of users at the top of the market.

Does that make sense compared to an arrangement like Vodafone's large financial stake in Verizon that's generated hefty revenues?