Friday, September 9, 2011

What of T-Mobile?

I have been reading everything I can about the AT&T/T-Mobile deal to find a unique view of the future of this transaction. Even the "experts" can't determine what is most likely to happen. We tried to follow the money and found: AT&T stock dropped only 5% when the DOJ opposition was announced and T-Mobile's stock dropped 10%. That tells us the consensus is that the outcome will negatively affect T-Mobile more than AT&T.

The biggest hurdle is that the Department of Justice does not want to lose a 4th national carrier and most of AT&T's potential alternatives call for doing just that. So, as of now, the Feds say T-Mobile must survive. Many have speculated who could come to the rescue. I even listed some possibilities in our comments of May 16, 2011. Any suitor would need to bring 10's of Billions to the table. If T-Mobile actually receives the penalty payment of cash, spectrum and roaming concessions from AT&T, it will be a stronger and more valuable company. This makes the idea of spinning off T-Mobile into its own company a viable option. That means you and I can own it (as stockholders). Wouldn't that be fun?

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