AT&T Inc. (NYSE:T) is on a second attempt of acquiring T-Mobile US Inc(NASDAQ:TMUS) after a miserable failure of a $39 billion deal in 2011. The current acquisition is likely to incorporate Sprint Corp (NYSE:S) given that its majority shareholder, Softbank is said t be letting go its control over the telecom. Grapevine has it that Softbank is seeking a win of an incredible transaction with Deutsche Telekom controlled T-Mobile.
A similar combination failed three years ago: What will change?
AT&T’s intended buy of T-Mobile three years ran into regulation skepticism. Hence it is obvious to get curious about what will make it go through this time. AT&T could be banking on the fact that T-Mobile, which is the number three U.S. wireless carrier has grown in its member subscription.
T-Mobile’s current member subscription of 68 million people is way above that of Sprint which is at 58 million. On the other hand, AT&T is at 132 million subscribers while Verizon Communications Inc. (NYSE:VZ) rests at 142 million. The figures explain better the importance of the impending buyout.
AT&T has been in several other buyouts
The carrier offered $49 billion for the purchase of DirecTV and another $85 billion for Time Warner. T-Mobile’s buyout is expected to cost close to $70 billion. In keeping up with Verizon’s competition, the company is offering four lines for $180, which will not require television subscription.
AT&T has also shifted to unlimited data, a move that many analysts are taking with a pinch of salt. Dave Heger, an analyst at Edward Jones writes, “It’s certainly a shift back to how things had previously been. They moved away from offering unlimited as a means to try to better monetize growth and data traffic, now it looks like we are going back the other direction.”
Nevertheless, AT&T still has a task ahead of convincing regulators how its impending deal will not hurt consumers. It will also have to explain how useful the savings from the combination will be given that the market is suffocating in the competition. In the meantime, AT& T’s stock closed at $41.48 witnessing an increase of $0.23 or 0.56%.
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