• YouTube
  • Facebook
  • Instagram
  • Twitter
  • LinkedIn

Sprint’s desperate pleas have become ‘the most urgent yet’ amid T-Mobile merger fears

Sprint Corp. continued its show of desperation this week, posting another steep drop in postpaid wireless subscribers and highlighting the challenges it faces as it tries to compete with better-positioned carriers.

The company on Tuesday reported a decline of 189,000 postpaid phone subscribers for its fiscal fourth quarter, marking the worst drop for SprintS, -0.36% since at least 2015. Sprint also posted deeper net losses than analysts had modeled.

As Sprint’s pending merger with T-Mobile US Inc. TMUS, +0.23% faces regulatory review—and potentially more opposition than previously anticipated—the company has stepped up its efforts to paint itself as being in dire need of a more high-tech partner. The idea is to convey to regulators that the deal is about saving Sprint, not creating consolidation in the wireless industry that would give carriers more pricing power.

“The most recent articulations of their predicament are the most urgent yet,” wrote MoffettNathanson analyst Craig Moffett. “Not only is their network badly deficient, they now concede, their communications with the investment community have also been ‘highly selective’ at best, and intentionally misleading at worst.”

Moffett continued that it “isn’t clear” whether regulators will find these arguments convincing. At the same time, Sprint is now “playing for longevity,” in his view, by pulling back on that sorts of promotions that had been a key part of the business strategy up until the deal announcement.

Sprint shares were down nearly 4% in afternoon trading Wednesday, while T-Mobile shares were off 1.8%.

The company can’t entirely pull back on big discounts given competitive pressures from AT&T Inc. T, +0.03% and Verizon Communications Inc.VZ, +0.04% said Instinet analyst Jeffrey Kvaal. “Thus, despite the shift away from older plans, postpaid [average revenue per user] is only stable,” he wrote.

Added Kvaal: “Given repeated references to the challenges the business is under, we would imagine Sprint is planning for its postpaid subscriber base to continue to decline.”

Cowen & Co. analyst Colby Synesael picked up on management’s assertion that if the merger were to be blocked, the company would have to reposition itself to become less focused on national wireless coverage. This “in theory would negate the argument it can remain a fourth national competitor,” he wrote, making “the binary impact of the pending merger with T-Mobile...even more extreme.”

Synesael recommended that investors stay on the sidelines in regard to the merger and advised that those bullish on deal completion purchase shares of T-Mobile instead.

Source: https://www.marketwatch.com/story/sprints-desperate-pleas-have-become-the-most-urgent-yet-amid-t-mobile-merger-fears-2019-05-08

#sprint #tmobile #merger #fears

EZ Unlocker.jpg
att banner.jpg

Wirelessdealergroup.com is not affiliated with any carrier, mvno, oem, manufacturer, or sites/newspapers that it is linked to.

© 2016 by Wireless Dealer Group. Proudly created by CE GrafX.