T-Mobile’s Recent “Hail Marys” Don’t Bode Well For the Merger

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The various regulatory reviews of T-Mobile’s merger with Sprint are now in the late stages of the fourth quarter, according to Craig Moffett of MoffettNathanson. It can only be a bad sign, Moffett observed, that T-Mobile has thrown two “Hail Mary” passes in recent weeks.

“When was the last time you saw a Hail Mary pass from a team that was ahead?” he said.

 “To be sure, T-Mobile’s commitment on February 4 to hold prices flat if the deal is approved, and their promise a month later, on March 6, to compete with Cable in rural markets by using Sprint’s 2.5 GHz spectrum for fixed wireless broadband, weren’t entirely new. They have been making the same arguments, albeit perhaps in more general terms, since they first announced the merger in April of last year. Still, it is hard to imagine they weren’t in response to something. And if that something was ‘we’re about to approve your merger,’ well, then they probably would have taken a knee instead.” 

Moffett and his team have stubbornly stuck to their 50/50 odds since the deal was first announced, first as the consensus (inexplicably, at least to them) grew more and more positive, and now as the consensus has grown more and more cautious.

“This time, we’re with the consensus,” he said. “It’s time to acknowledge that the odds of the deal are less than a coin toss.”

April 3, 2019

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