T-Mobile has no interest in Leap; Citi throws cold water on Q2

Still in the process of digesting MetroPCS, T-Mobile USA (TMUS +4.4%) says it isn't interested in outbidding AT&T (T -0.7%) for Leap Wireless (LEAP -1.2%).

Leap has slipped a little on the news, but is still at $16.53. AT&T agreed to buy Leap for $15/share in cash and the net proceeds from the sale of spectrum previously bought for $204M.

T-Mobile continues to trade higher thanks to its Q2 results, replete with strong (iPhone-driven) postpaid net adds, and solid 2H subscriber guidance.

Citi (Neutral) isn't crazy about T-Mobile's numbers. The firm notes service revenue still fell 7.5% Y/Y to $5.1B (below Citi's $5.22B estimate) and estimates OIBDA (hurt by iPhone sales) fell 58% Y/Y to $739M (below Citi's $1.1B estimate) after adjusting for Value Plan accounting changes.

The firm remains concerned about T-Mobile revenue/OIBDA growth prospects in light of " the rapid maturation of the prepaid category & competitive pressures in its postpaid segment."

CEO John Legere asserts T-Mobile is "taking customers from AT&T at a ratio of two to one."  If true, that represents a big reversal from recent trends.

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