AT&T CEO: T-Mobile Solves Spectrum Crunch

ORLANDO , Fla. (TheStreet) -- AT&T(T) reiterated its desire to boost its spectrum through its $39 billion acquisition of T-Mobile USA, during a panel of telecom heavyweights at the CTIA International Wireless event on Tuesday.

Speaking during a CEO roundtable moderated by TheStreet's Jim Cramer, Ralph de la Vega, CEO of Mobility and Consumer Markets at AT&T, explained why the telecom giant launched its bid for T-Mobile USA.

"One of the key drivers was the need for additional spectrum," said de la Vega. "Our data usage has grown 8,000% over the last four years -- it will grow eight times to 10 times in the next five years."

The heads of the nation's three largest wireless carriers discussed mobile broadband futures with TheStreet's Jim Cramer. From left, Cramer; Dan Mead, CEO of Verizon Wireless; Dan Hesse, chief of Sprint Nextel; and Rafael de la Vega, CEO of AT&T Mobility

Lack of available wireless spectrum presents a major challenge for service providers, particularly given the boom in data traffic caused by the emergence of smartphones, and, increasingly, tablets.

"What you saw announced Sunday allows the markets to be combined and more effectively solve the spectrum exhaust issue," added de la Vega.

Cramer asked the other CEOs for their thoughts on AT&T's bid, starting with Sprint(S) chief Dan Hesse.

"My opinion doesn't matter; it's the FCC, the DOJ," he quipped. Hesse, who is also chairman of the CTIA wireless association, added that he does have concerns that too much consolidation in the telecom sector could stifle innovation. "[It would] put too much power in the hands of just two carriers."

Currently, Verizon is the nation's largest wireless carrier with 93 million subscribers. If the AT&T and T-Mobile deal goes through, it would create a new No. 1 behemoth, with about 130 million subscribers.

Cramer went on to ask Verizon Wireless(VZ) CEO Dan Mead whether his company has a "dog in this hunt."

"We're certainly very interested with what is going on," replied Mead. "We will be watching what goes on here -- we will not be distracted by this."

The Verizon Wireless chief also confirmed that Verizon had looked at a possible T-Mobile acquisition, but concluded that there was no need for a deal.

Missing from the discussion was T-Mobile USA CEO Philipp Humm, who pulled out after the two companies announced their planned merger over the weekend.

At a keynote presentation that preceded the roundtable discussion, FCC chairman Julius Genachowski also spoke about the challenge of ensuring enough wireless spectrum for service providers, but did not specifically discuss AT&T's T-Mobile purchase.

"The coming spectrum crunch threatens American leadership in mobile," he said. Genachowski added that the FCC's goal is to free up 500 MHz of spectrum for broadband via voluntary spectrum auctions, likely involving chunks of spectrum currently in the hands of broadcasters. This can provide a capital infusion for those broadcasters that choose to participate -- it's the right idea at the right time, I haven't seen a better idea for freeing up spectrum before the crunch hits."

--Written by James Rogers in Orlando.

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