By: Jesse Cryderman

T-Metro rises, Dish bids for Sprint

Over the past few months there’s been considerable action in the US mobile market, but the biggest news is that T-Mobile and MetroPCS will combine operations. MetroPCS shareholders have approved T-Mobile parent Deutsche Telekom’s final offer, and since all regulatory approvals have been secured, the merger of the two mobile operators will be fast-tracked, and we mean fast—the companies targeted May 1 as their closing date, so by the time you read this, the deal will be done. There were several bumps along the way, but compared to the last time it ventured into merger territory, only to come up empty, T-Mobile’s recent journey was much less treacherous.

“This is a major step for Deutsche Telekom,” said CEO René Obermann in a press release, citing “our network modernization and the new T-Mobile USA management team, which has seen considerable success,” as other examples of the company’s achievements in the United States. He added, “The merger with MetroPCS is extremely important, since it enables us to be more aggressive in the USA.”

CFO Timotheus Höttges, who’s been named chairman of the new company, concurred, stating that “the merger adds valuable tailwind to our ‘uncarrier’ strategy” in the US. “We have radically changed our business model and launched drastically simplified tariffs. Together with MetroPCS, we will make considerable improvements to our competitive position with our combined state-of-the-art network, more powerful sales model and top devices like the Apple iPhone 5 and the Samsung Galaxy S4.”

Dish also threw the market a curveball when it dug deep into its cash stash to bid $25.5 billion for Sprint. That’s a cool $5 billion more than what SoftBank has put on the table. At the tail end of April, Sprint secured approval from the Japanese communications service provider (CSP) to enter into talks with Dish, but if it gets scooped, where does that leave Clearwire, which signed a deal at the end of last year to be wholly acquired by Sprint? Well, that deal is contingent upon Sprint being purchased by SoftBank, but who knows what will happen if Dish takes the reins. To make matters worse, according to Reuters, Clearwire’s board of directors as well as Sprint’s are being sued by the former’s minority shareholders for flouting “their fiduciary duties.” In other words, the shareholders smell a bad deal.

As a backup plan, the beleaguered 4G wholesaler may parcel out spectrum—rumors have surfaced that Verizon has bid $1.5 billion for Clearwire’s airwaves. Still, Sprint remains positive about its future with the company, announcing late last year in a press release that its “Network Vision architecture should allow for better strategic alignment and the full utilization and integration of Clearwire’s complementary 2.5GHz spectrum assets while achieving operational efficiencies and improved service for customers as the spectrum and network [are] migrated to LTE standards.”

But wait, there’s more! Whispers of a potential $100 billion Verizon buyout of Vodafone keep popping up, and they’ve been given credence by the latter CSP’s shareholders, although the half dozen interviewed by Reuters pegged $120 billion as their target price—$100 billion simply wasn’t enough for them to consider a sale.

But as Ralph Brook-Fox, UK equities fund manager at Ignis Asset Management, told Reuters, Vodafone is “sitting with a rather ugly set of assets once you lose the Verizon Wireless stake.” He added, “I think the merger or full takeover scenario, although not at the forefront of discussions right now, could actually end up being the more palatable deal.”