The GDC Blog

Vodafone’s recent divestiture of Verizon Wireless significantly increases the likelihood of its acquisition by either AT&T or Softbank. Vodafone’s international network assets, especially its African mobile payment solution joint ventures set the stage for increasing the pace of emerging market cross border commerce development.

AT&T has been a U.S business mainstay; railroads and telephones lines provided the backbone for America’s modern interstate commerce platform. In the great wired-line war, AT&T soundly defeated the competition and owns a significant share of the residential telephone and internet business. AT&T also holds significant wireless market share ahead of Verizon and Sprint. The big question that AT&T now wrestles with is “What will drive significant shareholder growth over the next 3-10 years?”

The answer could likely include AT&T acquiring targeted international network infrastructure in hypergrowth markets such as pockets of Africa and Eastern Europe like what Vodafone can offer. In Africa the growth in mobile wireless is directly linked to increased internet usage. Furthermore the growth of mobile payment and banking needs provides AT&T another once in a generation opportunity to lead commerce and communications innovations, much like erecting U.S. landlines furnished in the early 20th century. In emerging markets serving the unbanked has become a major growth driver. Wireless carriers whose network infrastructure powers mobile commerce applications hasten cross border commerce and will therefore likely yield its shareholders remarkable value in the coming years.

Broadly AT&T is presented two options, go big or stay at home. It can choose to focus on a domestic market where it built a dominant position and sell ancillary services or venture abroad where mobile internet proliferation is creating new business models and high growth opportunities.