Wells Fargo: Combined T-Mobile/Sprint would top AT&T and become second largest U.S. carrier

Wells Fargo: Combined T-Mobile/Sprint would top AT&T and become second largest U.S. carrier
AT&T better watch out, because one single act could leapfrog T-Mobile over AT&T to become the nation's second largest carrier. That one act would be the acquisition of Sprint by John Legere and crew. Wall Street securities firm Wells Fargo sees T-Mobile doing the buying in such a deal, a change from the firm's last report on the subject last December in which it predicted that Sprint would buy out T-Mobile.

The analysts' involved in the report said that T-Mobile will pay $10.84 a share for Sprint, which works out to a 27% premium over the current price of $8.55. Why would T-Mobile buy a competitor that isn't growing nearly as fast as it is? For one thing, Sprint has hoarded a ton of 2.5GHz spectrum. While the high-frequency airwaves don't travel nearly as far as the 600MHz spectrum that T-Mobile won in the recent FCC auction, T-Mobile's technical team is salivating at the chance to grab Sprint's portfolio.

T-Mobile executives have done a 180-degree change and now consider the 2.5GHz airwaves a "treasure trove that you could do amazing things with." With 5G launching in as soon as three years, T-Mobile has already announced plans for a coast-to-coast 5G pipeline; Sprint's spectrum could come in handy when it comes to building out a 5G network.

T-Mobile CEO John Legere calls Verizon and AT&T 'Dumb and Dumber'

T-Mobile CEO John Legere calls Verizon and AT&T 'Dumb and Dumber'

Deutsche Telekom, the giant European operator, owns 65% of T-Mobile. With that large a stake in the fastest growing U.S. wireless carrier, Deutsche CEO Tim Hoettges said, "We decide what, when and how," any deal involving T-Mobile gets done.

Did you know 3+4=2? Take the third largest carrier in the U.S., add the fourth largest carrier and suddenly you have the second-largest wireless carrier in the states. Prior to the deal, Verizon (134.2 million customers) and AT&T (113.9 million) were the top two state-side wireless operators. But combine number three T-Mobile (72.6 million) and number four Sprint (59.7 million) and you end up with a company carrying 132.3 million subscribers. That would top AT&T's head count and be only 1.9 million subscribers short of Verizon.

Now, the question is whether there will be a deal between T-Mobile and Sprint. T-Mobile CFO Braxton Carter says that talks between the two will definitely happen, and he called Sprint "a huge prize." Sprint CEO Marcelo Claure says that combining T-Mobile and Sprint creates a "turbocharged maverick" fighting for consumers.


The last time both firms were in merger talks, U.S. regulatory agencies like the FCC and DOJ made comments about not allowing such a deal to happen. But with the new administration in Washington D.C., things could be different this time around.

source: FierceWireless

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24 Comments

1. bugsbunny00

Posts: 2251; Member since: Jun 07, 2013

sprint will drag tmobile down,not a good move..

2. joevsyou

Posts: 1091; Member since: Feb 28, 2015

Tmobile can do it on their own, give it 3 years. They have been a study incline and it's not going stop anytime soon

12. g2a5b0e unregistered

That's completely unrealistic. In order to catch up to AT&T in 3 years, they would have to gain 15 million new customers each year without AT&T adding anyone over that span. They've been averaging somewhere between 5-6 million new customers a year for the last few years.

21. Lumia_Luigi

Posts: 173; Member since: Mar 22, 2017

They're burning through cash just like Sprint

3. Rock_Hardwood

Posts: 117; Member since: May 11, 2015

everyone i know is either leaving or has already left tmobile. As they grow their network cant handle the new users and with prepaid there is no loyalty. I was with tmobile for 10 years, now i am with att. I would like to see the next numbers of tmobile customers and see what the attrition rate is.

13. joevsyou

Posts: 1091; Member since: Feb 28, 2015

LOL bull. and why would there be this "loyalty" with prepaid. What is even this loyalty you speak of? Just because you are with a company for 10 years do you want them to call you every morning and greet you?

19. Reybanz88

Posts: 82; Member since: Jul 28, 2016

What's laughable is you going to AT&T and speaking about loyalty... They constantly screw over their customers rather its post or pre paid....

22. g2a5b0e unregistered

You must not know very many people then. T-Mobile has more than doubled their user base in less than 5 years. Clearly, tons of people are coming over to the carrier & staying.

4. jsjammu

Posts: 169; Member since: Nov 13, 2014

I am with ATT as well after 3 years with TMO. Just got tired of their dead spots. Speeds are great where available but not consistent at all. I do love how TMO has and continues to change wireless industry.

5. BuffaloSouce

Posts: 1116; Member since: May 01, 2017

They'd have to have some killer deals and coverage for me to even consider dumping my Cricket prepaid service. I only pay $35 a month for 4GB of data that I never use. I've had the other two and both their coverage is straight butt cheeks where I live.

8. BlackhawkFlys

Posts: 899; Member since: May 07, 2014

$35 a month for 4GB? I get 2.5Gb a week for just $1.5 plus it also give me $.50 off-net credit plus 150 on-net minutes.

6. fastfreddy123

Posts: 66; Member since: Mar 25, 2017

Really? Sounds like the only friends you have are credit challenged rock_hardwood The post paid Churn rate was 1.3 compared to ATT which had bout 1.0 Sprint had 1.6 and Verizon of course was best marketrealist.com T-Mobile’s postpaid churn peer comparison Among the top four largest US mobile players, Verizon (VZ) continued to have the best postpaid phone customer retention in 4Q16. In the quarter, Verizon and Sprint (S) had postpaid phone churn rates of 0.90% and 1.6%, respectively. Meanwhile, AT&T (T) reported a postpaid phone churn rate of 0.98% during 4Q16. The porting ratio is the ratio of net subscriber additions to net losses. T-Mobile’s postpaid porting ratio was 1.55x in 4Q16, nearly even with 3Q16’s ratio. As far as Tmobile losing customers they gained over 798,000 postpaid and added 386,000 with Metropcs. Verizon lost 289,000 phone customers, and 307,000 total subscribers according to Android Authority. ATT hadnt released there numbers yet. As most can see Tmobile is doing very nice for itself and not bleeding customers as rock_hardwood has implied.

7. L0n3n1nja

Posts: 1503; Member since: Jul 12, 2016

Meh, Verizon and AT&T are hurting, Sprint is failing. Give it a couple more years and T-Mobile will be much closer to Verizon for customer base and network coverage. I'm still with Verizon after testing T-Mobile and enjoying unlimited data last fall on a prepaid because they don't yet offer good enough coverage on MN and ND, but they've been rapidly improving.

11. fatTony

Posts: 113; Member since: Dec 20, 2012

Where in MN do you live? I get excellent coverage even in Little Falls and Brainerd. I know someone who lives in the Meadowlands and just switched from Verizon to T-Mobile because he discovered the great coverage in his area.

9. rebretz

Posts: 95; Member since: Dec 26, 2011

I hope T-Mobile buy Sprint just for the spectrum. Sprint has a ton of spectrum just wasting away.

14. Soundjudgment

Posts: 370; Member since: Oct 10, 2016

This is *exactly* why they should merge... and merge now! All that sweet... sweet bandwidth wasting away under Sprint's control. Gaining their subscriber-base in the deal is just a plus.

10. fatTony

Posts: 113; Member since: Dec 20, 2012

Of course, it is also possible that AT&T could acquire Sprint if they view a T-Mobile/Sprint merger or acquisition as a major threat to their business.

18. Rampage_Taco

Posts: 983; Member since: Jan 17, 2017

AT&T attempted to acquire T-Mo a few years back (when they were still #4) and that didn't work. The FCC, FTC, as well as the competition weren't for it. I'm sure neither deal will happen if Verizon has any say in the matter

15. baldilocks

Posts: 1422; Member since: Dec 14, 2008

And still a lot less coverage than AT&T.

16. baldilocks

Posts: 1422; Member since: Dec 14, 2008

Large in subscriber numbers, but still a lot less coverage area than AT&T.

17. TBomb

Posts: 1000; Member since: Dec 28, 2012

Someone just got paid thousands of dollars to do that simple addition... I'm jealous

20. MartyK

Posts: 1043; Member since: Apr 11, 2012

No! Leave it the way it is... 4 carries battle for customers!

23. Greenmule

Posts: 128; Member since: Apr 24, 2017

The operative partial sentence in that post is: **Deutsche CEO Tim Hoettges said, "We decide what, when and how," any deal involving T-Mobile gets done.** That's right, Tim Hoettges, John Legere's boss, the real El Jefe, Pharaoh of Deutche Telekom. he's the decider. The subscriber growth curve is flat to ever so slightly declining. T-Mo is not going to "port ratio" their way past neither AT&T nor Verizon. There will always be churn, Perhaps, AT&T and VZW were holding the door for some that left. VZW made Xfinity a MVNO. AT&T has Direct TV. In a little while, you'll get Direct TV to your phone without having to have at home service. Deutsche Telekom has to buy the subscriber base in order to expand their footprint.

24. DOGIEFRESH

Posts: 316; Member since: Jul 15, 2009

Is not gonna happen, AT&T can sue the FCC if they let tmo and sprint merge, remember the reason was we need 4 carriers and more competition not 3

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