AT&T downgraded by JP Morgan following decision to abandon T-Mobile deal
Cusick told clients that the mobile carrier industry still needs to consolidate or else "companies like Sprint, Leap and MetroPCS could struggle." He added that a "re-invigorated T-Mobile USA could be a consolidator over time or a driver of price competition and eroding cash flow." He also sees AT&T buying back $4 billion of its shares to keep the company's debt/equity ratio constant next year. The analyst told clients that he sees AT&T's profit margins under pressure from smartphones, specifically the Apple iPhone. High subsidies for new phones are cutting into AT&T's profit margins"
Other forecasts made by Cusick include AT&T purchasing more spectrum in the near-term from MetroPCS and Leap Wireless, and in the long term from Dish Networks and Clearwire. The carrier is seeking government approval to close a previous deal to buy spectrum from Qualcomm and last night urged the government to allow the deal to be completed. T-Mobile, according to the analyst, is having problems without having the Apple iPhone in its lineup. Besides a possible partnership with Dish Networks, which we previously reported on, adding 4G service from LightSquared or Clearwire is a possibility. He sees the nation's fourth largest carrier getting aggressive in both pre-paid and post-paid offerings.
1. snowgator posted on 20 Dec 2011, 15:34 1
I can see a consolidation of carriers, especially smaller regional ones. Maybe Sprint absorbing a smaller carrier or 2 that uses CDMA. If T-Mobile gets a green light to exist, their are plenty of GSM carriers that may help it's footprint. I kinda feel that they market is a little saturated right now, and regional carriers may have problems keeping up with tech, especially as Smart Phones replace feature phones.
As do AT&T, I can see a year or two of transition to recover from this, but they ain't a weak link, so they will rebound just fine.
T-Mobile needs to get someone who sees it for the viable option it is. This company has got great potential to be a huge success. What isn't to like?