Boston, MA 05/28/2014 (wallstreetpr) – There is more than meets the eye in the recent progress noted in the performance of T-Mobile US Inc (NYSE:TMUS). The U.S. No. 4 carrier added more wireless subscribers to its network than any of its three competitors in 1Q2014. The company also purchased more smartphones in the quarter than its closest rival and potential suitor Sprint Corporation (NYSE:S).
Although the carrier remains at No. 4 in terms of overall subscriber numbers, T-Mobile is sparing no effort to upgrade its network and infrastructure as it goes on an all-out war to attract more users to its side. However, while the latest developments in the company especially the ability to attract more subscribers should come as good news for the owners of T-Mobile, Sprint may find it hard to purchase the operator.
Hard job convincing regulator
It is a well-known reality that U.S. regulators have always wanted to maintain the number of top carriers in the U.S. market at no less than four. As such, regulators have always frustrated merger efforts by players in the top-four position. However, SoftBank, the owner of Sprint Corporation, seeks to acquire T-Mobile US Inc (NYSE:TMUS). SoftBank’s bid for T-Mobile could come in June or July.
Efforts to combine Sprint and T-Mobile are aimed at taking on the might of Verizon Communications Inc (NYSE:VZ) and AT&T Inc (NYSE:T) that control the lion’s share of the U.S. telecom market. Therefore, a combined company that reduces the number of top players from four to three is expected to generate competition that would eventually lead to low costs and high quality services in the telecom market.
However, as good as the idea may be, the fact that T-Mobile US Inc (NYSE:TMUS) recently showed stellar performance by overtaking rivals in adding more wireless subscribers to its network may work against its merger into Sprint. Analysts are of the opinion that it would be difficult to convince the regulators that T-Mobile US Inc (NYSE:TMUS) is under market threat that it needs to merge into Sprint to survive.
TMUS on the rampage
In 1Q, T-Mobile US Inc (NYSE:TMUS) added 1.3 million wireless subscribers to its network. That number was 300,000 more than what analysts projected for the quarter. Its wireless subscriber addition in the three months to March also dwarfed the 1.16 million that Verizon and AT&T added during the same period.
