AT&T Sounds Out EU on Impact of NSA Role
AT&T Inc. T -1.12% Chief Executive Randall Stephenson met with the European Union's top telecom regulator in Davos last week, as the giant U.S. carrier continues to look into a possible acquisition in the region.
At a dinner Tuesday night during the annual gathering of top executives and political figures in the Swiss resort town, Mr. Stephenson asked Commissioner Neelie Kroes how revelations of data-gathering programs conducted by the National Security Agency would affect the ability of companies like AT&T to do business in Europe, people familiar with the conversation said.
There was no discussion of specific deals or targets for AT&T, the people said, although Mr. Stephenson did generally reiterate his interest in broadening investment and operations in Europe.
Ms. Kroes replied that U.S. companies, like AT&T, face a trust problem in Europe as a result of the spying disclosures and it is in the interests of all the parties to get that resolved. The scandal is likely to be a live issue as the continent gears up for EU-wide European Parliament elections in May.
Sky News reported the meeting earlier.
Mr. Stephenson and other AT&T executives have signaled an interest in buying a wireless operator in Europe, highlighting the potential to expand the continent's use of mobile data and shift pricing models to capture more revenue as use rises. That's essentially what AT&T and rival Verizon Wireless have done in the U.S.
In conversations with analysts, AT&T has given the impression that Vodafone Group VOD.LN -0.60% PLC would be a good fit after the U.K.-based company completes its sale of its 45% of Verizon Wireless to Verizon Communications Inc. VZ -0.48% on Feb. 21. Hurdles, however, include the need to get clearance from regulators, a process that has been complicated by revelations the U.S. spied on European leaders and collected large amounts of data on phone and Internet communications.
German and other European officials have previously said that any attempt by AT&T to acquire a major wireless operator would face intense scrutiny given the company's involvement with such programs, which in many cases relied on data turned over by phone companies.
Mr. Stephenson has expressed his interest in Europe in calls with Wall Street analysts but has also said there are other ways to get exposure to the continent than an outright acquisition. AT&T has been studying its options in recent months.
Bankers have been courting the U.S. company, but no moves are expected to be made until after Vodafone completes its $130 billion sale of its Verizon Wireless stake.
One consideration for AT&T is that the company has grown too large to get significant acquisitions past antitrust authorities in the U.S. The company grew rapidly via a string of deals over the past decade and is now the country's second-largest wireless operator behind Verizon.
AT&T is among the U.S. phone companies that provide calling data to the NSA to feed the far-reaching surveillance programs disclosed by former NSA contractor Edward Snowden, The Wall Street Journal reported last June.
Among the revelations in Mr. Snowden's disclosures was how the NSA was able to collect data about people in other countries when that data passes through the U.S. It was later revealed that German Chancellor Angela Merkel and other world leaders were monitored by the NSA.
President Barack Obama pledged earlier this month to end the government's mass collection of American phone data and laid out plans to adopt new privacy protections for non-U.S. citizens, including ending government spying on heads of state of close American allies.
Ms. Kroes indicated last week that those steps were welcome but that Europeans are eager to see follow through.