Why We Might See a Shakeup in the Telecom Industry Soon | Business Markets and Stocks News

Investors in the telephone or cable industries have had a tumultuous year — unless they’ve picked a very small handful of winners. Telecom giants AT&T (NYSE: T) and Verizon (NYSE: VZ) have been hit hard by low-priced upstart T-Mobile (NASDAQ: TMUS) and are now in the midst of a vicious pricing war despite the existence of only four national carriers.

Cable companies have been able to grow with increased broadband use, but those with large media arms have been hit by the cord-cutting phenomenon resulting from the rise of streaming services.

Given these headwinds, most of the industry is looking hard at acquisitions to expand capabilities and lower costs. Now that a certain milestone has passed, the time for acquisitions may be now. Let’s look at who may be flirting with whom.

Image source: Getty Images.

Quiet period over

The end of March marked the end of a multistage wireless-spectrum auction. Wireless companies agreed to pay $19.77 billion for 70 Mhz of spectrum that television broadcasters sold for around $10 billion. The government — which pocketed the spread — compelled broadcasters to sell, since wireless had the need and many people now receive their broadcast channels by cable or satellite. 

This spectrum auction was a long process, and during the bidding period, telecom and cable companies weren’t allowed to speak with each other about bidding strategies, mergers, and acquisitions. Now that it’s over, telecom companies can talk to each other about hooking up.

T-Mobile, DISH, and Sprint

The company in the catbird seat is T-Mobile. It’s earned a reputation as a low-cost disrupter in the space, and its stock has increased 60% in the past year.

T-Mobile and Sprint (NYSE: S) tried to merge in the recent past, but the Obama administration preferred to keep the number…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *