Analysts Weigh In on Possible T-Mobile/ MetroPCS (PCS) Tie-Up
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Up: 8 | Down: 5 | New: 26
Rating Summary:
12 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Shares of MetroPCS Communications (NYSE: PCS) went ballistic yesterday on news of a potential merger with T-Mobile USA, a subsidiary of Deutsche Telekom. As the headlines cool, analysts are beginning to weigh in on the deal.
Bank of America analysts don't think the deal will solve T-Mobile USA's biggest problems, namely the high churn rate or its lack of either a 4G or iPhone offering. The merger between T-Mobile USA and MetroPCS would also create a "logistical nightmare" due to the different technology platforms used by two companies, say analyst.
Still no 4G and no iPhone, and a potential logistical nightmare, so what’s the end game here?
Bernstein analysts say the deal will give Deutsche Telekom a tax-efficient way to separate itself from T-Mobile USA. Additional, the potential merger with MetroPCS could create more scale and a larger spectrum footprint, according to JPMorgan, although DTE's management may not want to commit to such a move at present.
Bank of America analysts don't think the deal will solve T-Mobile USA's biggest problems, namely the high churn rate or its lack of either a 4G or iPhone offering. The merger between T-Mobile USA and MetroPCS would also create a "logistical nightmare" due to the different technology platforms used by two companies, say analyst.
Still no 4G and no iPhone, and a potential logistical nightmare, so what’s the end game here?
Bernstein analysts say the deal will give Deutsche Telekom a tax-efficient way to separate itself from T-Mobile USA. Additional, the potential merger with MetroPCS could create more scale and a larger spectrum footprint, according to JPMorgan, although DTE's management may not want to commit to such a move at present.
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