T-Mobile should be sold to Sprint
T-Mobile is small and losing customers. It needs a partner.
T-Mobile, the Deutsche Telekom (DT)-owned cellular carrier in America, is a failure and an abject one at that.
The firm lost 77,000 subscribers in the third quarter. Most analysts blame the attrition on a poor lineup of handset products and tremendous competition from Verizon Wireless (VZ) and AT&T (T). The two larger companies each added over 1 million customers in the quarter.
T-Mobile has 33.4 million customers in the U.S., and its chances of doing well as the No. 4 firm in its sector are fading to nothing.
T-Mobile’s only chance of being viable is if it is part of a larger carrier. Sprint (S) needs it the most. It has slightly fewer than 50 million customers, making it smaller than AT&T and Verizon Wireless. Combined with T-Mobile, its subscriber count would be competitive with the other two companies.
Deutsche Telekom would do better owning a piece of Sprint as a proxy for its future success -- even if it had to put some cash into a deal for Sprint to take its T-Mobile customers.
The argument against a business combination is simple. Integrating two carrier platforms is complex.
The favorable reason for a transaction is that Sprint will be first to market with a new 4G-technology WiMax. That ultra-fast wireless system could pull in new customers for Sprint and T-Mobile. Sprint already has the support of Clearwire (CLWR) and such tech giants as Intel (INTC).
T-Mobile has no future. WiMax does.
Top Stocks writer Douglas A. McIntyre is an editor at 24/7 Wall St.
Copyright © 2014 Microsoft. All rights reserved.
The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.