Sprint higher following Deutsche upgrade. Son says acquisition needed.

Deutsche's Brett Feldman has upgraded Sprint (S +1.4%) to Buy following yesterday's Q4 report, albeit while leaving his PT unchanged at $9.25. He cites Sprint's spectrum advantage (presumably a reference to its high-frequency assets following the Clearwire deal), and the carrier's 2-year EBITDA growth outlook.

However, Feldman still expects major subscriber losses in 1H14, followed by "a return to modest growth" once Sprint's Network Vision 4G initiative is finished. He's also skeptical a T-Mobile USA (TMUS +0.4%) deal will happen in light of regulatory concerns.

But while regulators continue signaling their skepticism, SoftBank's (SFTBF) Masayoshi Son appears undeterred in his quest to merge the #3 and #4 U.S. U.S. mobile carriers. Son tells the WSJ it would be "a dream within a dream" to challenge Verizon and AT&T without the scale provided by an acquisition. "I can't settle for No. 3 or No.2. It's my personality."

Recent WSJ and Bloomberg reports suggested Sprint/SoftBank are weighing their options in the wake of recent DOJ/FCC comments.

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Comments (2)
  • AggGrow
    , contributor
    Comments (210) | Send Message
    Forget TMobile! There are much more appropriate acquisition targets. US Cellular would be far easier to integrate. TMoble makes sense because it has a bigger presence in larger markets where Sprint has failed to deploy coverage, but the technology differences are so large as to make an integration a much more difficult and expensive proposition than a couple of smaller strategic rollups and a concentrated effort to finish the buildout. I bet there are big cultural issues too.
    Furthermore, I get the DoJ's position. Hesse should tell Son that you just can't set yourself on fire to get the DoJ to do something that goes against their mandate.
    Even without the DoJ, ARPU's are going to drop - they have to. Sprint needs to get off the idea that they can short circuit this by acquisition and get back on the Hesse execution trail while the gettin's good.
    12 Feb 2014, 11:42 AM Reply Like
  • The Deep Value Investor
    , contributor
    Comments (299) | Send Message
    Masayoshi Son needs to buy out NIHD to increase his American empire and to strengthen the Sprint network along the Mexico US border.
    12 Feb 2014, 01:59 PM Reply Like
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