Hello fellowship,
I posted earlier in March about the T-Mobile and MetroPCS merger. The scenarios that needed to occur did indeed occur as I predicted. T-Mobile met the demands of Paulson and PSAM and reduced the debt load. The readjustment actually closed higher than the expected Price/Share that was stated in the SEC filings. However, that is expected since the new deal that reduced the debt load. Furthermore, now that T-Mobile has more of a wireless spectrum to work with it can compete with the 2 top U.S. wireless which is dominated by Verizon and AT&T by market share.
Moreover, The wheels of time have begun to spin. The next pivotal paradigm in making noise in the telecommunications company will be the decision to expand their global network by buying out LEAP wireless. An article written by Mayank Rasu from Seeking Alpha shares the same view as I. He even provides the link to the same article in which I read as well where the analyst predicts that there is a 70% chance for a buyout of LEAP wireless (LEAP). However, it is once again speculation. The information from the analyst could indicate that it is possible because they have deeper access to information than the retail investor. Moreover, I do not merely speculate on the Merger and Acquisition component alone. The company's fundamental has shown that it has exemplified a "Value" to it as Mayank Rasu reiterates. The reason is because it has consistently improved it's revenue over the years and has attracted users with it's prepaid service plans. In addition, the wireless spectrum it owns is like an oiling rig that pumps "black gold" in terms of the telecommunications spectrum. This "treasure" that LEAP wireless holds truly is the hidden gem that will assist bigger telecommunications company expand their wireless spectrum along with their customer base. In addition, the competition for air waves over the years and the demand for air wave will further intensify the game to see who can control the platform.
The other side of the argument is that it has taken on excessive debt load, and I myself have agreed with the amount of debt the company has on it's financial statements. However, the company has recently closed a $1.45 Billion Loan that indicates that it is slowly addressing the problem.
The closing of the T-mobile and MetroPCS entities has created a minute tidal wave in the industry, but not a torrential storm. As you drive out to your local shopping area, you may begin to notice that all MetroPCS dealers will slowly change their signs to "T-Mobile." Also, It seems that it would be in the best interest for T-Mobile and MetroPCS to consider LEAP Wireless because it matches its future plan for how T-Mobile will service its customers. CEO of T-Mobile, John Legere, has already rolled out a plan that is similar to "Pre-Paid" service in which people can select plans without worrying about being restrained to the usual "2-Year Contract." This is exemplified in the T-Mobile commercials that you will see appear on TV in the year of 2013. The commercial depicts how T-Mobile Cowboy has a pink Hat, who is part of a big group of cowboys who represent the big players in the telecommunications industry and they speak about how they like things are being contained. Then the cowboy with the pink hat (representing T-Mobile) walks away from the group and says he will make the shift that will help the public. This commercial is trying to get the message through that T-Mobile is trying to create the new paradigm in this saturated industry full with smart phones. Ultimately, more consolidation is going to be needed and if T-Mobile wants to position itself in market share and entity presence. The firm may want to evaluate their alternatives and attain a hidden gem at a good price that will further expand their "network": Which may include taking the "Leap" of faith that will assist in its strategy and operations down the road.
Phil
At the time of this writing, I have no positions in the securities listed above, but may position myself in LEAP wireless as soon as the merger is settled officially and evaluate what T-Mobile's next strategy will be.
