The looming impact of a merger between T-Mobile and Sprint and its effect on the tower market has been a growing topic of conversation between Jennifer Fritzsche, Managing Director, Equity Research at Wells Fargo Securities and her clientele of money managers.
“The key question continues to be what TMUS will do?” Fritzsche said. Given its recent commitment to the regulators to keep prices low for consumers, she said one has to wonder if this merger is approved, will there be a greater focus on costs than was outlined in their original synergy expectations? She calls it the “Neville effect” whereby T-Mobile CTO Neville Ray, “could lay the hammer on vendors more than he originally outlined when the deal was announced on 4/29.”
“This could have an impact on the towers, more than the original expectation,” she said, although she thinks the decommission tail will be “a long one” if the S/TMUS merger is indeed successful. “If successful – the “new T-Mobile” could be the only true national wireless player out there. Remember one of the main lessons from the Metro Connect conference two weeks ago, wireless needs wires.” In the end, Fritzsche said, the impact on TMUS will mean a lot more densification and a lot more cell sites to spend through that lack of wires.
February 12, 2019