Boston, MA 08/07/2014 (wallstreetpr) – Sprint Corporation (NYSE:S) decided to back off in the plan for acquisition of T-Mobile US Inc (NYSE:TMUS), giving a win-win situation to the customers and also shooing away from the plan of increased competition to Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T).
T-Mobile’s Uncarrier Strategy
While T-Mobile US Inc (NYSE:TMUS) has gone way too ahead in its strategy to shake up the market with fee slashing, analysts are of the view now that Sprint will have to follow the similar footsteps by either slashing prices or improving in the offerings. The proposed deal worth $32 billion rooted from Softbank Corp. (Japan) (OTCMKTS:SFTBY)’s CEO, Masayoshi Son, who argued that combination of Sprint and T-Mobile would lead to increased value and difficult competitor for Verizon and AT&T.
Federal Communications Commission View
In this regard, the Chairman of Federal Communications Commission, Tom Wheeler said that four national-level wireless providers were good for the consumers. It was for this reason that the regulators disagreed and gave hints of the same for Sprint Corporation (NYSE:S) and T-Mobile tie-up. Mr. Wheeler said that Sprint will now have an opportunity to direct its attention towards strong competition.
Deal Demise Shows Negative Impact on Market
While a range of analysts believed that the proposed deal had a considerable potential of taking the entire industry towards profitability; the dismissal of deal is causing negative impact as well. While the shares of T-Mobile US Inc (NYSE:TMUS) dropped 7% to $31.58, the Sprint shares took a plunge of 18% to $5.95.
In the meanwhile, the investors also fear that the cash flow of Sprint Corporation (NYSE:S) might be affected as it takes up price slashing and tough competition. However, the analysts believe that the stock of company would take on stability at approximately $6 as it would try to gain more customers. It is nevertheless in the womb of future to see what Sprint appears to be.
