AT&T could pay about 80 billion pounds ($124 billion) for what’s left of Vodafone, according to Robin Bienenstock, an analyst at Sanford C. Bernstein, basing her estimate on a valuation of six times earnings before interest, tax, depreciation and amortization.
AT&T has examined takeover candidates including Vodafone, U.K. mobile carrier EE (a joint venture between Deutsche Telekom and Orange), as well as parts of Spain’s Telefonica.
That might strike some as odd, given the declining amount of revenue being earned by European mobile service providers. But AT&T seems to be thinking, as does SoftBank’s Sprint, about ways to boost revenue by emphasizing fourth generation Long Term Evolution services.
Compared to the United States, for example, 4G is undeveloped in much of Europe.
But it would also be fair to say that if Verizon Wireless does buy out Vodafone, then Vodafone would be in position to be a buyer itself. And subsequent deals could set off a major round of consolidation.
"Once you have companies that are after global scale, it becomes a case of eat or be eaten," said Robin Bienenstock, an analyst for Bernstein Research. "The chessboard is going to re-form really, really rapidly."
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