Seeking Alpha

Don't bet on a Sprint/T-Mobile merger happening, says Goldman. The combined company would own...

Don't bet on a Sprint/T-Mobile merger happening, says Goldman. The combined company would own $35B in high-yield debt, the firm points out, and Deutsche Telekom (DTEGY.PK) might not be crazy about a deal that would face regulatory scrutiny and have a major equity component to it (ed: another hurdle is that the carriers run incompatible 3G networks). The firm thinks a Sprint (S) bid for MetroPCS (PCS - previous) or Leap Wireless (LEAP) is more logical. (Sprint CEO remarks)
Comments (7)
  • Headcoach
    , contributor
    Comments (431) | Send Message
     
    Duh! If AT&T couldn't make it work, why would anyone think Sprint could make it work. Beside, Sprint has a lot on their plate with the iDEN conversion and Clearwire's TD-LTE network to worry about getting more Spectrum. They have all the spectrum they can use in CLWR!
    11 Sep 2012, 02:22 PM Reply Like
  • Dan Seeks Alpha
    , contributor
    Comments (18) | Send Message
     
    The board already shot down CEO Dan Hesse's planed PCS takeover in February.
    11 Sep 2012, 04:03 PM Reply Like
  • kmi
    , contributor
    Comments (4000) | Send Message
     
    Considering the mess Sprint made with getting involved with Lightsquared -after- its investment in Clearwire, one wonders what Hesse is really thinking in terms of usable spectrum.... It's also one of few carriers with experience in how much of a mess mixing incompatible phone networks can be.

     

    I don't think I buy a Tmob-S merger as much as a MetroPCS-Sprint joinup in the end, regardless of the board's previous position.
    11 Sep 2012, 07:05 PM Reply Like
  • Bizlitgroup
    , contributor
    Comments (4) | Send Message
     
    Gotta agree with Goldman, Deutsche Telekom is not stupid, which is what any company would be to enter into any kind of deal with Sprint. $35 billion debt that has to be serviced, a declining market as people are in mass exodus to prepaid, flat (at best) smartphone sales, a stupid deal with Apple to get the iPhone (Deutsche Telekom won't agree to Apple's terms, so why would DT enter into a deal with Sprint, who has a $15 billion iPhone albatross around its neck.

     

    Deutsche Telekom is also not going to enter into deal where it won't get guarantees, similar to what it got from AT&T (besides, Sprint has zero dollars to entice someone the likes of Deutsche Telekom to start the ball rolling).

     

    Even if the parties started courting, Washington does not like Deutsche Telekom's people. (Recall the FBI had German law enforcement execute two search warrants, one on Rene Obermann's house, the other his offices.) So any deal that has T-Mobile's fingerprints on it, other than an outright sale to U.S. interests, is not going to "pass go" through Washington.

     

    Oh, and it does not help Sprint or T-Mobile that the Dept. of Justice said in arguments to the Court in the AT&T/DT acquisition litigation last year that the DOJ would oppose a TMOUS/Sprint deal.

     

    While Sprint might think it is simpatico with Washington on proposed mergers and acquisitions, the fact remains Deutsche Telekom is in the sewers of Paris (literally and figuratively).
    11 Sep 2012, 07:11 PM Reply Like
  • jjbrooks75
    , contributor
    Comments (4) | Send Message
     
    Sprint+T-Mobile merger would not face the same hurdles AT&T+T-Mobile did. It would probably get approved. AT&T is a much larger player than Sprint, market dominance was the concern with AT&T+T-Mobile. But why would Sprint merge with T-Mobile? They can just steal their customers with better equipment (Iphone), customer service and a new network? Sprint wont take the bait.
    11 Sep 2012, 07:12 PM Reply Like
  • kmi
    , contributor
    Comments (4000) | Send Message
     
    iPhone is being unofficially supported by T-Mo, including if you bring the phone in getting access to T-Mo's apps.
    11 Sep 2012, 07:20 PM Reply Like
  • Erb69
    , contributor
    Comments (166) | Send Message
     
    But most markets are at 2G speeds, they have been trying to refarm in the few markets where they have similar frequencies as AT&T, so some of their customers can get 3.5G speeds.
    12 Sep 2012, 12:14 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|