New report claims Comcast or Charter ripe for a T-Mobile US takeover
T-Mobile US’ future remains a hot topic among the analyst community, with waves of predictions on what the future holds for the domestic market’s most aggressive player.
The latest dig came from Oppenheimer analyst Tim Horan, who in a new report predicts either Comcast or Charter Communications are the most likely buyers of T-Mobile US. The move is expected as traditional telecom operators like Verizon Communications and AT&T move more aggressively into the video space.
“We see Comcast (with [T-Mobile US] and partnering with other cable companies), AT&T, Verizon Communications and Sprint the four likely surviving companies,” Horan said, according to Investor’s Business Daily.
T-Mobile US parent company Deutsche Telekom, has been open about its interest in finding a taker for its U.S. assets for the right price. Speaking during DT’s annual shareholders meeting, DT CEO Tim Hoettges explained that despite recent improvements across its U.S. operations, DT has a “duty to go on improving the return on T-Mobile US,” adding that “if we can find a partner who will help us to do so, we will obviously consider it.”
The sentiment is nothing new for T-Mobile US, which, despite posting industry leading customer growth, continues to struggle for profitability. The carrier managed to trim net losses during the first quarter, and has yet to show a financial return on its customer growth.
DT has been looking for ways to monetize its investment in T-Mobile US, which initially cost the company more than $50 billion when it acquired VoiceStream Wireless in 2001. In 2013, DT managed to dilute its stake in T-Mobile US through a complicated acquisition of MetroPCS, and last year nearly sold all of its stake to Softbank and in a separate deal a portion to France’s Iliad.
Hoettges late last year named a number of potential acquirers of T-Mobile US, including Comcast, Dish Network and América Móvil.
Earlier this year analyst firm Macquarie Research weighed in on the merger speculation, saying it makes sense for DT.
“Based on recent meetings our colleagues have held with DT [management], we believe that DT is more sold on the synergies created by fixed mobile convergence than by an improved midband spectrum position,” the firm said. “As such, we believe DT could retain a larger equity stake in Comcast or Newco than it would with Dish. As DT holds the cards with [T-Mobile US], we think a deal with Comcast in the low- to mid-$40s [per share], with a large stock component would be palatable for DT.”
Industry observers have been stating the need for T-Mobile US to forge closer ties with the cable industry. The carrier has reportedly been testing interoperability between Wi-Fi hot spots and the carrier’s voice-over-LTE service with cable provider Bright House Networks.
Comcast, fresh off its rejected attempt to acquire fellow cable provider Time Warner Cable, has increased its push into the “mobile” communications space using Wi-Fi technology. The company claims it has more than 8 million hot spots that many expect could be use to launch a quasi-mobile service.
Comcast in 2012, along with some cable partners, unloaded its deep spectrum portfolio in a deal with Verizon that was valued at around $3.6 billion. Following the deal, Comcast began offering Verizon Wireless services as part of a service bundle.
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