In the wake of Time Warner deal, what happens to T-Mobile?
As pay-TV companies continue to shore up business through mergers and acquisitions, analysts say T-Mobile could be the next target.
As pay-TV companies continue to shore up business through mergers and acquisitions, analysts say T-Mobile could be the next target.
In the internet age, consolidation is an attractive option for large telecom companies. Wireless carriers want in-house content to draw mobile users, and media producers want digital distribution. That鈥檚 why, on Saturday, AT&T revealed plans to purchase Time Warner for $85.4 billion. And the acquisitions likely won鈥檛 stop there, analysts say.
鈥淭he takeout target over the next twelve months has got to be T-Mobile,鈥� New Street Research analyst Spencer Kurn told Reuters.
T-Mobile, the third largest wireless carrier in the United States, would make an attractive purchase. The company accounted for most of the industry鈥檚 subscriber and revenue growth in the third quarter, and shares have jumped 9.5 percent since Monday. And there鈥檚 no shortage of potential buyers: Comcast, Dish Network, and Mexican telecom company America Movil may show renewed interest in T-Mobile in the coming months, say analysts.
Public perception of the media industry is becoming increasingly negative. Only 32 percent of Americans say they have a 鈥済reat deal鈥� or 鈥渇air amount鈥� of trust in the mass media 鈥� an 8 percent drop from just one year ago 鈥� according to a recent Gallup poll.
Meanwhile, large-scale media acquisitions continue in spite of antitrust regulators. In 2013, Comcast took NBCUniversal in a $17 billion deal. A year later, Time Warner bought cable TV provider Charter Communications for $38 billion. Last year, AT&T snapped up DirecTV for $48.5 billion.
But what does that mean for consumers?
Mergers "can be a mixed bag,"聽海角大神鈥檚 Schuyler Velasco reported聽in May 2014, as AT&T was pursuing a DirecTV deal:
But big mergers may also benefit consumers, analysts say. Consolidated telecom giants, such as the new AT&T, tend to dominate certain regional markets. By teaming up, media producers and wireless carriers could compete in those same spaces. That鈥檚 why prices may actually drop, if and when T-Mobile is purchased.
鈥淚f we as consumers have the choice for either AT&T or Verizon or CenturyLink or Comcast or whatever in the same space, that will drive innovation, and drive prices down,鈥� media industry analyst Jeff Kagan told the Monitor in 2014. 鈥淭here is a growing level of competition that there wasn鈥檛 10 years ago.鈥�
This report includes material from Reuters.