AT&T Stalking Europe for Mergers .
The telecommunications giant is considering buying a counterpart in Europe, a bet that it can best escape constraints on growth at home by getting into a new wireless market where it can upgrade technology and roll out more lucrative pricing strategies, people familiar with the carrier's thinking said.
The company is currently studying targets, and a deal—if one happens–could come before the end of the year, those people said.
Such a deal would carry a lot of risk. Wireless companies have pursued international strategies before with mixed results. There would be few opportunities to make the deep cost cuts that are typically needed to justify big acquisitions because the networks wouldn't overlap. AT&T also would be stepping into a much more competitive market than it has in the U.S. and would face a new set of regulators.
AT&T's top executives are debating whether a move abroad would make sense, but some believe a unique opening now exists to buy a carrier in a major European market such as the U.K., Germany or the Netherlands, the people said.
Consideration of an overseas merger comes almost two years after Chief Executive Randall Stephenson unveiled his $39 billion plan to acquire T-Mobile USA, which U.S. antitrust authorities shot down, blunting AT&T's efforts to expand further at home.
The carrier is now weighing the benefits of competing in one of Western Europe's major economies against the risks of taking focus away from the U.S., where it would face tougher competition once Japan's Softbank Corp. 9984.TO +2.08%completes its acquisition of Sprint Nextel Corp., S -1.60%the people said. It is expected to conclude later this year.
It couldn't be learned whether AT&T is engaged in negotiations with European carriers or which companies it might be circling. European carriers including Royal KPN NV, KPN.AE +2.58%the biggest telecom company in the Netherlands and Everything Everywhere, one of the biggest wireless carriers in the U.K., are on AT&T's radar, the people said.
KPN is already 28% owned by Latin American telecom giant América Móvil, a company in which AT&T owns a small stake and whose owner, Carlos Slim, is a close friend of Mr. Stephenson. KPN looked into selling its Belgian and German