Analysts Predicting an Uncertain 2017 for the Wireless Industry

December 21, 2016 Industry News, merger, Softbank, Sprint, T-mobile, Trump

A merger could be within reach under a Trump Presidency putting some cell site locations at risk for consolidation, according to wireless lease experts at TowerPoint Capital

Yahoo News – ATLANTA, April 5, 2016 -- Since President-elect Donald J. Trump won the general election in November, talks and speculation of a possible merger has spread across the telecommunication industry. Stock prices of Sprint and T-Mobile have increased and Tower Companies' stocks, such as SBA and American Tower, have decreased. With a republican in The White House next year, most expect a Trump administration to be more lenient and laissez-faire in regards to the oversight of mergers and acquisitions.  With the market movement and a merger-friendly administration, 2017 is expected to be a year of change and uncertainty according to many wireless industry analysts.

In 2012, AT&T attempted to takeover T-Mobile, and in 2014, Sprint placed a $32 billion bid for T-Mobile. Both merger attempts were unsuccessful due to its unpopularity with the Democratic-led FCC under President Obama. Sprint's parent company, SoftBank, was quoted in August of this year saying they are still interested in merging. On December 6, after meeting with President-elect Trump, the SoftBank CEO announced his plans to invest $50 billion in US. As a result, Sprint and T-Mobile's stocks increased again.

Due to the election, market movements, and recent announcements, wireless industry experts are giving their predictions of what could happen in the New Year. T-Mobile CFO, Braxton Carter, said "It's hard to imagine there's not going to be more openness to consolidation." In regard to SoftBank's announcement of investing $50 billion in the US, a Bellevue-based wireless industry analyst, Chetan Sharma, said "It's a smart move on SoftBank's behalf. Opening up dialogue this early in Trump's administration sets SoftBank up for its next M&A move." Sharma further predicted that Softbank will renew a proposal to acquire T-Mobile in a matter of weeks, not months.

A merger between Sprint and T-Mobile will shake the entire industry. Change will be felt from the consumers to the tower companies. Substantial decommissioning is a common theme after a telecom merger occurs. In 2013, when T-Mobile acquired Metro PCS, T-Mobile decommissioned 10,000 of 12,500 Metro PCS sites due to redundant cell coverage. Similar consolidation occurred during the mergers of Sprint and Nextel, Verizon and Alltel, and AT&T and Cingular. According to the Managing Director of TowerPoint Capital, "We are experiencing all the historic signs of a near term merger or acquisition. The stock price of the carriers that are being targeted are up and the stock prices of the tower companies are down." In addition to a Republican administration starting next year, a telecom merger could be within reach in the near future.

About TowerPoint Capital:

TowerPoint Capital is a leading institutional investor in and manager of wireless real estate across the United States. Since 2007, we have created long-term value for our landlord and corporate partners by emphasizing the company’s core values Knowledge, Professionalism, Integrity, Partnership. TowerPoint's leadership team possesses fifty years of combined experience, having invested in (or financed) over $1 billion in telecommunications infrastructure and real estate-related assets. TowerPoint is headquartered in Atlanta, GA with satellite offices around the US.