The telecommunications landscape in the United States is expected to undergo some drastic changes in the not-too-distant future. Following AT&T's announcement that it's planning to acquire Time Warner for $86 billion, many industry experts believe that a chain reaction of mergers and acquisitions across the entire sector is in order. Seeing how the incoming Trump administration is more likely to approve this transaction than not, the said merger may prompt other wireless carriers in the country to take similar actions in an effort to compete with AT&T's growing media and media distribution empire. In fact, some analysts specifically point at T-Mobile as the top takeover target in a world in which AT&T acquires Time Warner.
Now, back when SoftBank purchased Sprint in 2013, the Japanese tech giant also planned to obtain a controlling stake in T-Mobile and merge the two wireless carriers into a single company. However, back then, the Democratic-led Federal Communications Commission and the Department of Justice effectively stopped that acquisition from happening. As an ideologically different administration is set to replace them next month, industry experts predict that the regulatory landscape will soon become suitable for a possible merger of Sprint and T-Mobile. However, that still doesn't mean this deal will happen, even if the new US administration doesn't stand in the way.
As Walter Piecyk, an industry analyst at BTIG Research claims, the odds of SoftBank acquiring T-Mobile and consolidating it with Sprint in the next few years are less than 20%. Despite the fact that Trump recently announced SoftBank will invest $50 billion in the US economy, Piecyk believes that the Japanese tech giant won't use this investment as leverage to acquire T-Mobile in the next two years. As the BTIG Research analyst pointed out in a research note published earlier today, this acquisition would negatively impact the growth of tower leasing. Seeing how this is a crucial factor as far as valuing wireless carriers is concerned, a hypothetical merger between Sprint and T-Mobile would negatively affect the value of the new company. In addition to that, Piecyk points out how Deutsche Telekom, the controlling shareholder of T-Mobile US isn't interested in selling its stake in the company. Piecyk concludes that T-Mobile and Sprint will likely continue operating independently, at least until all wireless carriers in the country deploy 5G infrastructure and start offering related services.