A merger between T-Mobile’s German owner Deutsche Telekom and Spr...
A merger between T-Mobile’s German owner Deutsche Telekom and Sprint is unlikely to emerge due to “uncertainty over the public safety spectrum rebanding and the possibility that Sprint’s purchase price will continue to decline,” said Stifel Nicolaus. It was…
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responding to a Wall Street Journal report on a possible DT-Sprint merger. Stifel said it believed the government review of the purchase would be complex and close, though its preliminary assessment was that “antitrust and regulatory authorities are more likely than not to approve it.” For a merger, both companies need to show government and shareholders that it would give them the spectrum needed for Long Term Evolution deployment, and the two would cite a need to increase spectrum holdings following the 700 MHz auctions, said the report. Stifel said approval would be easier under a Republican administration. A deal would be “significantly beneficial” to T-Mobile by “reducing pricing volatility in the wireless market,” said Bernstein Research. It said Sprint has 19 percent of the U.S. wireless market, while T-Mobile has 12 percent, so together they would exceed AT&T’s 27 percent. The report said a deal would be good for Verizon, AT&T and Sprint because competitive intensity, and price risk, would shrink. The report noted bad news for Sprint -- that it will must quit its remaining 800 MHz spectrum by June 26 under a ruling by the Court of Appeals for the District of Columbia Circuit. It means Sprint must replace millions of iDEN handsets now active in the affected spectrum, at potential cost of billions. The report characterizes the result as disastrous, predicting that the FCC will grant some kind of relief. T-Mobile and Sprint declined to comment. Sprint stock rose 86 cents, or 10.9 percent, to $8.75, in the U.S., while DT declined 1.5 percent to $18 in Frankfurt.