Wall Street Relentlessly Pushing for Sprint, T-Mobile Merger Wall Street continues to keep pushing for more telecom sector mergers and consolidation, even though it remains clear these deals are consistently not in the consumer's best interests. Despite the fact that most T-Mobile customers would prefer things be left as is (read: competitive), Wall Street is particularly bullish on a T-Mobile and Sprint merger. Sprint has been pushing the Trump administration to sign off on such a deal, promising oodles of US investment and thousands of new jobs if such a deal is approved.

In the real world these merger "synergies" rarely if ever materialize (just ask Charter customers ). But Wall Street analysts like UBS' John Hodulik continue to relentlessly beat the synergy drum "We continue to believe a Sprint/T-Mo announcement is likely given the benefits of moving from four wireless players to three and the significant synergies it would create," Hodulik wrote in a research note. "SoftBank’s Masayoshi Son has already laid the political groundwork, promising to invest and create jobs in the U.S. We also note that the company has focused on strategic value rather than valuation in past acquisitions; we believe a premium here would make sense given asset scarcity and also valuation support and synergies." But while reducing the number of major wireless competitors from four to three might be great for investors and executives, it's less great for consumers. Mergers in telecom historically result in worse service as companies face less competition, exemplified by cable's growing broadband monopoly -- and the obvious impact the rush to consolidate had on customer service and pricing. Job promises also rarely materialize given the inevitable push to eliminate redundant positions. Obviously the real world impact on human beings is not really Wall Street's concern, however. And Hodulik thinks the Sprint and T-Mobile deal will heat up now that the incentive auction has ended, lifting rules preventing companies from colluding during the bidding process. "With the incentive auction wrapping up, carriers will be free to start talks for the first time in a year,” he wrote. “Over this time period, a new deregulatory administration has entered the White House and wireless competition has become extremely aggressive, setting the stage for potential M&A. While many scenarios are possible, we believe T-Mobile stands to benefit given its strong fundamentals and strategic value." If T-Mobile isn't acquired by Sprint, Comcast and Charter could also attempt a deal, analysts predict. T-Mobile customers: are you excited yet? If T-Mobile isn't acquired by Sprint, Comcast and Charter could also attempt a deal, analysts predict. T-Mobile customers: are you excited yet?







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Most recommended from 42 comments



tc1uscg

join:2005-03-09

Guantanamo 41 recommendations tc1uscg Member Well then, if Wall Street is behind it.. Walk away. Don't listen to Wall Street. They know nothing except trying to make money on the backs of the customers having to put up with both companies. en103

join:2011-05-02 10 recommendations en103 Member Wall Street cares about.... Investors, and return.

Sprint cares about... survival

T-Mobile cares about organic growth and taking on VZW/AT&T.



In 'theory' a merger would help all of this, but...



What about the 'customer' ? To be honest, none of these businesses 'really' care about the customer. T-Mobile has come the closest by pushing for what customers have 'wanted' vs. selling them what is easier (more profitable / less work) for the business. If T-Mobile merges with ... just about anything of any decent size, you can see T-Mobile becoming either a Sprint (struggling to pay debt) or an AT&T/VZW (charge as much as you can get away with, and make customers feel like they should be thankful) jorcmg

join:2002-10-24

USA 6 recommendations jorcmg Member Thicker than thieves. Are these the same Wall Street guys speculating on Sprint stock right now pounding this drum beat.