Boston, MA 05/09/2014 (wallstreetpr) – Skepticism continues to increase on whether the proposed merger between, T-Mobile U.S Inc. (NYSE:TMUS) and Sprint will ever come to a full realization. This comes as Deutsche Telecom chief executive officer voiced his doubts on the proposed deal. Signals from authorities in the recent past have been pointing to the fact that the deal may not be approved. The merger aims at addressing increased competition from big players in the industry led by AT&T Inc. and Verizon Communications.
Sales to Drop by 8%
T-Mobile is currently boosting its earnings at the expense of earnings as a way of building a serious challenge to AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). The wireless technology company made impressive gains in the first quarter having added additional 2.4 million customers more than that of other peers in the industry. Sprint on its part is understood to be pushing for the merger after securing financing for the offer.
It awaits to be seen how the proposed merger will end up considering AT&T had been blocked by authorities in 2011 to go forth with its acquisition of T-Mobile U.S Inc. (NYSE:TMUS). The biggest challenge at the moment is cash drains issues that T-Mobile expected to face in the coming quarters. Analysts expect the company sales to slow by up to 8% with an expansion in the U.S markets cited as the main reason behind the slow growth.
Sprint to Table an Offer in July
Growth spree has already come at a steep price as T-Mobile U.S Inc. (NYSE:TMUS) continues to upgrade airwaves as a way of luring clients with discount offers. T-Mobile’s adjusted EBITDA for the first quarter slumped by 26% to $381 million despite revenue increasing by 15%.
There have been reports in the media that Sprint is preparing to table an official bid as early as July with the management optimistic that the deal will get a much needed approval. T-Mobile shares have plunged by as much as 79% over the past year as investors await anxiously on the final decision on the proposed merger.
