Analyst: T-Mobile Is M&A Challenger for Sprint

A Raymond James Financial Inc. (NYSE: RJF) analyst predicts that T-Mobile US Inc. will remain an independent force on the U.S. wireless scene and challenge Sprint Corp. (NYSE: S) for smaller M&A opportunities in the coming months.

Forbes noted that Sprint Corp. (NYSE: S) shares fell Monday following a rally last week, after Raymond James analyst Ric Prentiss cut his rating to "market perform" from "outperform." However, that may not be the most interesting thing about the analyst's research note.

"We do think M&A in the U.S. wireless space will occur over the next 12-18 months," Prentiss writes. He adds that it's not surprising that M&A fever is swirling about Sprint, but thinks it is unlikely to have a go at T-Mobile.

There's speculation that Sprint could possibly make a play for the Deutsche Telekom AG (NYSE: DT) subsidiary after it failed in its bid to merge with AT&T Inc. (NYSE: T). Sprint is also once again being linked to a possible take-over of MetroPCS Inc. (NYSE: PCS).

Prentiss, however, thinks that T-Mobile's new CEO and tower sell-off show that it is serious about staying in the game and becoming a 4G challenger for Sprint:

    We think the September 19 announcement of the new T- Mobile USA CEO hired externally and the $2.4 billion tower sale to Crown Castle on September 28 are strong indicators that T-Mobile USA, and its owner Deutsche Telekom, are not interested anytime soon in network sharing or merging with Sprint. We believe T-Mobile is more likely a competing bidder against Sprint for smaller M&A deals that bring spectrum, cash flow, synergies, and the potential for public currency.

Both operators have been looking for money -- and spectrum -- for their respective 4G buildouts.

For more

— Dan Jones, Site Editor, Light Reading Mobile

joset01 12/5/2012 | 5:20:03 PM
re: Analyst: T-Mobile Is M&A Challenger for Sprint

A regional carrier with AWS licenses could make sense for a T-Mobile buyout right?

Sign In