After the news of Sprint potentially making a bid for T-Mobile, experts from the telecom industry were called in to discuss the possibility of this deal and the ramifications it would have for the other major carriers. Fox Business hosted Gerard Hallaren of Janco Partners who shared his opinions of the deal. “I think this is a pretty intriguing deal because it should be accretive to Sprint fairly easily presuming the bid is somewhere around the stock prices and I also think it leaves Verizon holding a bit of a bag,” he said. This deal has been compared to AT&T’s deal two years ago when they attempted to acquire T-Mobile but wasn’t permitted to do so. Hallaren doesn’t believe Sprint and T-Mobile will face the same regulatory opposition as AT&T and T-Mobile did. “You have two fairly weak competitors and this is a way of making a stronger one. I think the regulators may have a different point of view on this than the AT&T/T-Mobile deal.” Verizon may not be rooting for this deal to go through. According to Hallaren, “T-Mobile has been in negotiations with Verizon to buy some of its 700 MHz spectrum, the A block and that probably would have been a multi-million dollar deal and if the deal with Sprint goes through, they’re not going to need that spectrum.” Even though T-Mobile and Sprint are two of the largest mobile carriers in the U.S., combined they still have less customers than Verizon or AT&T. This reason is why many believe the deal would be approved. “I would not be surprised by this deal at all, particularly given the valuation disparity between the two companies. Sprint does sell for a higher multiple of EBITA than T-Mobile. I think that Sprint would like to get as much market share as possible. I suspect, but don’t know, that the FCC would feel pretty good about this deal because it would create a competitor that was as strong as, or may be a better fighter, against AT&T and Verizon,” Hallaren explained.
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