Analysts Cautiously Optimistic About T-Mo/Sprint Merger Chances

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By Dominik Bosnjak July 31, 2018, 11:48am
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T-Mobile and Sprint will be providing investors with an update on their efforts to merge on Wednesday morning, before trading begins, with Wells Fargo analysts being cautiously optimistic about their chances of eventually having the consolidation approved. Due to a general lack of major, highly concentrated opposition, the company's industry watchers gave the tie-up a 60-percent chance of going through, marking the first occasion on which a major financial institution in the country made a non-neutral prediction on the outcome of the proposed deal valued at some $26.5 billion.

Sprint and T-Mobile will provide their shareholders with an update on the situation as part of their consolidated financial reports for the second quarter of the year, with both being scheduled to publish them tomorrow. The merger is also likely to be one of the main topics of their subsequent earnings calls, with investors and analysts being expected to push the two wireless carriers on their expectations and willingness to commit to major divestments should the United States government demand such concessions before approving the deal. Boost Mobile founder Peter Adderton is still the only high-profile industry figure that advocated for significant divestment requests to be made, arguing that any other scenario will likely lead to increased prices and lower service quality in the prepaid segment that's dominated by the third- and fourth-largest network operator in the country.

The two mobile service providers remain adamant that their merger will create more competition in the 5G space than it eliminates in other fields, adding that the deal would also lead to the creation of new jobs, improved wireless coverage, and a number of other benefits. The Federal Communications Commission is presently soliciting public comments on the proposed consolidation, with one recent study suggesting only a fifth of American adults are outright opposed to the tie-up, though more than half still aren't prepared to form a full opinion on the matter. The two companies are hoping to see their efforts to combine their operations approved by the end of the first half of 2019.

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July 31, 2018, 11:48am
Source: Bloomberg
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