HOME     MENU     SEARCH     NEWSLETTER    
NEWS & INFORMATION FOR TECHNOLOGY PURCHASERS. UPDATED ABOUT A MINUTE AGO.
You are here: Home / Hardware / Banks Plan for Sprint's T-Mobile Bid
BMC IT solutions:
IT products & services for the ultimate competitive business advantage.
BMC.com
Report: Banks Working To Fund Sprint's T-Mobile Bid
Report: Banks Working To Fund Sprint's T-Mobile Bid
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
DECEMBER
20
2013

At least six banks are working up proposals to finance a Sprint buyout of T-Mobile, according to The Wall Street Journal. The paper cited “people familiar with the matter” and pointed to the financing talks as another sign that the company is preparing to announce an official offer.

According to the Journal’s sources, the deal could be worth more than $20 billion and Sprint may make the bid in January. The paper reports T-Mobile has a current market valuation of $21.8 billion. If the carriers merge, the combined value of the resulting company would be about $57 million.

We turned to Mark Lowenstein, an analyst and managing director at Mobile Ecosystem, for his thoughts on the potential merger, which many are saying would face a tough battle for regulatory approval. He told us he has long believed that the original “Big Four,” which is really now the “Big Two Plus Two,” would ultimately settle at a structure of three national carriers.

“There are few, if any countries today, that have more than three facilities-based wireless operators who are all doing well financially,” he said. “There aren't many reasons why the United States is any different.”

Maintaining the Status Quo

The big question isn’t whether or not Sprint can raise the funds to buy T-Mobile. The big question is whether or not the deal would make it through the Federal Communication Commission’s (FCC) scrutiny. The combined Sprint and T-Mobile would still have fewer subscribers than AT&T or Verizon, so Lowenstein doesn't see the Department of Justice pursuing an antitrust case.

“I think Sprint, T-Mobile could successfully argue that they would have a better chance of competing together than separately, particularly given the investment in network and spectrum that will continue to be required to keep pace with the annual near-doubling in data consumption,” he said. “The FCC, however, will look at this differently.”

Lowenstein called it an early important test for newly-minted FCC chariman Tom Wheeler. Confirmed just two months ago, he doesn’t seem to be willing to rock the boat. He has publicly stated his preference for four national wireless carriers in the market.

Spectrum Impacts

“The FCC will also, naturally, be concerned that a Sprint, T-Mobile deal will dilute the value of upcoming spectrum auctions. I understand that the FCC would prefer to look at a deal like this after the auctions play out and once Sprint has taken a real shot at a turnaround with Network Vision in place,” Lowenstein said. “But, we also have to be realistic: it will be 2017-2018 before services utilizing spectrum from the incentive auctions become commercially available. That's a long time in a world where Snapchat and Vine barely existed two years ago.”

Lowenstein argued that the FCC should also consider that a merged Sprint and T-Mobile would increase the chances that a fourth entity, possibly in the form of Dish, could successfully enter and compete in the wireless business. The FCC could take some actions to help smooth the way for this possibility, he said, rather than waiting for the whole Sprint scenario to play itself out over the next couple of years.

“A maverick fourth player, plus enough spectrum and an activist policy to encourage aggressive resale plays -- think Amazon, Google, Netflix -- might compensate for concerns about industry consolidation and pricing,” he concluded. “I'm all for wireless competition, but maybe that competition should start taking different forms.”

Tell Us What You Think
Comment:

Name:

nycnikato:
Posted: 2013-12-20 @ 7:18pm PT
One of the main reasons Masayoshi Son told Sprint's board that it would be better to merge with Softbank was that there would be less debt than if Sprint had merged with Dish. Now Masayoshi Son wants to use banks to get into more debt so he can but T-mobile. Ridiculous.

Like Us on FacebookFollow Us on Twitter
TOP STORIES NOW
MAY INTEREST YOU
BMC's shared success is built on 6 fundamental principles: 1) An Intuitive User Experience 2) Agile Application 3) Actionable Intelligence 4) Adaptive Automation 5) Compliance & Risk Mitigation 6) Optimized Infrastructure & Cost. Contact BMC to learn more.
MORE IN HARDWARE
Product Information and Resources for Technology You Can Use To Boost Your Business

ENTERPRISE HARDWARE SPOTLIGHT
Making a major change to its usually staid design philosophy, HP unveiled an all-in-one PC with built-in projector and surface-enabled touch, designed to make 3D scanning and printing easy.
© Copyright 2014 NewsFactor Network, Inc. All rights reserved. Member of Accuserve Ad Network.