AT&T: MediaOne is last big cable buy
The telecom giant's MediaOne acquisition will be the last "significant" cable purchase, according to CEO C. Michael Armstrong.
AT&T's Armstrong moved to quell speculation that his company would continue its buying binge with a run at one of the few remaining large independent cable companies, in a conference call with reporters this morning.
"We have no plans or strategy to make another significant acquisition in the cable industry," Armstrong said.
The industry would continue to see subscriber swaps and smaller changes in ownership stakes, but this would be business as usual, he said. "In terms of a significant acquisition, I don't think we need it," he added.
Does this mean Armstrong's cable appetite is sated?
Not exactly. Analysts noted that the key word was "significant," which didn't rule out smaller purchases or equity stakes in the remaining large companies.
But Yankee Group analyst Boyd Peterson said that the company will have its hands full swallowing Tele-Communications Incorporated and MediaOne, which together form the core of a national cable operation.
AT&T's purchase yesterday of Lenfest Communications, a Philadelphia cable operator, shows the company's willingness to continue down the incremental cable growth path.
"Never believe the words 'last' or 'only'," Peterson said. "But I would take him [Armstrong] at his word. They're not missing components of their strategy now."
Armstrong and analysts also noted that other issues, aside from AT&T's own appetite, limit the company's ability to move ahead with any additional large cable buys.
The chief executive conceded that regulators' concerns about the company's control of cable markets would mount with each purchase. "Regulatory-wise, I don't think [another purchase] would be digestible," he said.
And the final reason to forgo a bid for another big cable operator?
"There's three more of them," Armstrong said. "And none of them are for sale."
Shares of AT&T jumped today following news of its success in the cable bidding war. Stock rose 4.875 to 56.4375 in heavy afternoon trading of 16.6 million shares.