J.P. Morgan sees a 90% chance of T-Mobile getting bought out within five years

J.P. Morgan sees a 90% chance of T-Mobile getting bought out within five years
U.S. banking and securities house J.P. Morgan sees some consolidation upcoming in the wireless industry. One carrier that J.P. Morgan sees as being a near certainty (90%) to be purchased some time in the next five years is T-Mobile. The company was already the subject of a deal in 2011 with AT&T, but the latter had to call it off after U.S. regulators promised to turn down the transaction. With the deal scuttled, T-Mobile received spectrum and cash from AT&T as the break-up fee. That loot helped turn T-Mobile from an also ran, into what is arguably the most influential U.S. wireless operator.

According to Morgan, Sprint could have T-Mobile in its cross-hairs. The nation's fourth largest carrier is always on the list of possible T-Mobile buyers. Regulators put the kibosh on a possible Sprint and T-Mobile tie-up in 2014; since then, T-Mobile leaped over Sprint to become the third largest carrier in the states. According to J.P. Morgan analyst Philip Cusick, there is now a 35% chance that Sprint and T-Mobile hook up. That is up from just 10% in September. Cusick says that if a deal is announced between T-Mobile and Sprint, there is a 70% chance of regulatory approval.

Besides Sprint, there have been persistent rumors about a cable company buying T-Mobile. It would be an expensive, but strategic play for a cable or satellite provider looking to jump right into the industry. Dish is one name that has been bandied about.

Still, Sprint parent SoftBank has promised to increase its investments in the U.S., which could increase the likelihood of a Sprint purchase of T-Mobile. Sprint is 80% owned by SoftBank, while 65% of T-Mobile is owned by German wireless giant Deutsche Telekom. The latter's CEO, Tim Hoettges, said in November that he wasn't "in the mood" to sell T-Mobile. The executive said that he was waiting for a change in the U.S. regulatory environment under President Trump.


Meanwhile, someone has been buying T-Mobile shares. The stock has risen from $47 to $59 since August.

source: Reuters

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7 Comments

1. Acdc1a

Posts: 473; Member since: Jan 21, 2016

I think Sprint and T-Mobile's success will determine whether they can combine. Keep adding subs like T-Mobile has been doing for 3 years and regulators tell you you're doing fine alone and don't need a combination. T-Mobile will be as big as the big 2 in less than 5 years. A combination with Dish or Comcast is much more likely.

3. libra89

Posts: 2281; Member since: Apr 15, 2016

I hope they don't combine with either of those companies :/

2. phonester

Posts: 30; Member since: Oct 27, 2016

"...there is now a 35% chance that Sprint and T-Mobile hook up"...Woah, PA's writer getting adventurous.

4. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

The chances of a CDMA based carrier buying a GSM based carrier is "Zero". Since T-Mobile is larger than Sprint, I would see T-Mobile buying Sprint and not the other way around. As big as T-Mobile is now, Sprint likely couldn't come up with enough money to buy T-Mobile. What we need is to get rid of multiple spectrums. The USA should just be GSM. All phones should be sold unlocked, so we can pick whatever carrier we want. They all should be offering 100% coverage of the USA by now. The fact that they don't is BS. How hard is it to put a cell tower in the middle of nowhere?

5. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

And all the women should have big breasts. There are numerous ways an acquisition is made: a bank loan (with warranty from SoftBank), a capital injection, a direct loan from shareholders etc.

7. TheRequiem

Posts: 245; Member since: Mar 23, 2012

This has got to be the silliest comments I have read in recent decades. GSM is a 1990's technology that is barely in use today anymore, it's all LTE, HSPA and at the very least UMTS. T-Mobile would not be able to buy Sprint, Sprint is owned and backed by Softbank, which is a far larger company than T-Mobile and DT combined so it is more likely T-Mobile would be bought out by Sprint any day of the week. It is no longer hard to combine network assets, the network would be the easy part... the hard part would be integrating both of the companies billing systems and store/ call center processes. Network towers can be re-banded quickly and LTE frequencies would be able to be combined easily. They wouldn't even attempt to combine 3G since 3G will be obsolete in a few years in favor of LTE and 5G. Multiple spectrums doesn't matter anymore, they can be bonded together with LTE Advanced carrier aggregation. Also, T-Mobile isn't much bigger than Sprint and Sprint still has 60 million + customers and are by no means small by any stretch of the imagination.

6. Spedez

Posts: 542; Member since: Aug 29, 2014

Dat crazy guy...

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