MetroPCS (PCS) President Keys Downplays Potential Leap (LEAP) Merger, But Says It Isn't Off the Table
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MetroPCS (NYSE: PCS) is seeing some early pressure Thursday following comments from President Thomas Keys in a CNET interview yesterday.
Why? Partially because Keys downplayed a potential merger with Leap Wireless (Nasdaq: LEAP).
Mostly, Keys highlighted how both of the companies face spectrum constraints and a combination of the two wouldn't solve those issues.
But, Keys didn't rule out any merger. CNET said Keys "...described it as a matter of "sequencing," in which the companies have to obtain additional airwaves before considering a combination."
Otherwise, Keys said partnerships with companies like Dish Networks (Nasdaq: DISH) and Clearwire (Nasdaq: CLWR) would ease some of MetroPCS' spectrum issues. Dish has been acquiring spectrum in fire sales and Keys said its looking for a wireless partner to help build-out the network. In addition, Clearwire is converting its network to 4G LTE, looking to wholesale spectrum in the process. Keys said he isn't interested in wholesaling, since the economics behind such a deal tend to make it unattractive.
On tougher competition from the likes of Sprint (NYSE: S), AT&T (NYSE: T), and Verizon (NYSE: VZ) into the prepaid space, Keys said he isn't fazed. The increased focus on the prepaid segment, Keys noted, only validates the service.
PCS shares are down about 0.5 percent while Leap is 0.5 percent in positive territory.
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Why? Partially because Keys downplayed a potential merger with Leap Wireless (Nasdaq: LEAP).
Mostly, Keys highlighted how both of the companies face spectrum constraints and a combination of the two wouldn't solve those issues.
But, Keys didn't rule out any merger. CNET said Keys "...described it as a matter of "sequencing," in which the companies have to obtain additional airwaves before considering a combination."
Otherwise, Keys said partnerships with companies like Dish Networks (Nasdaq: DISH) and Clearwire (Nasdaq: CLWR) would ease some of MetroPCS' spectrum issues. Dish has been acquiring spectrum in fire sales and Keys said its looking for a wireless partner to help build-out the network. In addition, Clearwire is converting its network to 4G LTE, looking to wholesale spectrum in the process. Keys said he isn't interested in wholesaling, since the economics behind such a deal tend to make it unattractive.
On tougher competition from the likes of Sprint (NYSE: S), AT&T (NYSE: T), and Verizon (NYSE: VZ) into the prepaid space, Keys said he isn't fazed. The increased focus on the prepaid segment, Keys noted, only validates the service.
PCS shares are down about 0.5 percent while Leap is 0.5 percent in positive territory.
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