Analysts predict winners from AT&T, T-Mobile failure: Consumers


Author: Cecilia Kang
Coverage Type: analysis
Location:
Wall Street, 11 Wall Street, New York, NY, 10005, United States

Whom does Wall Street think is the winner coming out of AT&T’s failed attempt to buy T-Mobile? Consumers.

Well, they don’t necessarily put it that way. From their perspective, it’s not good for investors if the industry retains four major wireless players duking it out for new customers. That may hurt corporate margins — the money they make above the costs of running their business — but the implications could be positive for users. “Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack. That means customers can still get lower rates as the industry competes for their dollars.

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