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Citi: Operational rebound means tougher case for Sprint/T-Mobile tie-up

Published 11/15/2016, 04:43 PM
Citi: Operational rebound means tougher case for Sprint/T-Mobile tie-up
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  • Conversations about Sprint (S +3.2%) and T-Mobile (TMUS +1%) getting together in a merger, to combine their struggles against the top two wireless providers, are running into one problem, according to Citi: The two upstarts aren't struggling as much as before.
  • Operational rebounds at Sprint and T-Mobile will make for a harder case before regulators who would have to be persuaded to sign off, the firm says. An attempt to merge in 2014 was denied by authorities.
  • "We think Sprint and T-Mobile are more likely than not to reconsider a merger scenario, but the (TV spectrum) auction, other strategic options, and regulatory complexities may slow down any attempt during 2017," writes analyst Michael Rollins.
  • T-Mobile led the big four carriers with 851,000 net adds in branded postpaid phones, and added 684,000 net subs in branded prepaid to boot. Sprint, meanwhile, added 347,000 net postpaid phone subs in a rebound quarter.
  • "We come back to an essential issue that we believe hurt the companies' prospects for consolidation in the last go-around -- if it's not broken, why fix it?" Rollins says.

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