Friday, 16 November, 2018

Sprint shares plunge after T-Mobile merger talks called off

Sprint shares plunge after T-Mobile merger talks called off Sprint shares plunge after T-Mobile merger talks called off
Nellie Chapman | 07 November, 2017, 01:38

Altice USA, the fourth-biggest US cable operator, will harness Sprint's network to offer customers wireless service through a new strategic MVNO agreement. The latter will employ Sprint's network to give its subscribers access to wireless voice and data. In return, Sprint allows Altice USA to launch a wireless service using Sprint's network. The statement did not include any financial terms of the deal. Talks between T-Mobile and Sprint ended when both carriers and their majority investors couldn't reach an agreement over which side would have control of the combined company. For its part, Comcast's Xfinity Mobile service is only available to existing Comcast wireline broadband customers.

Comcast Corp. started selling wireless service this year on Verizon Communications Inc.'s network, and Charter Communications Inc. plans to launch service next year.

Added Sprint President and CEO Marcelo Claure: "As content and connectivity continue to converge, we believe this approach will be a model for future strategic arrangements across multiple industries including cable, tech and others". While it could be quite easy to assume that Sprint moved forward on the Altice deal because of T-Mobile backing down, it's just as easy to assume that Sprint announced the Altice deal with the timing that it did in order to mitigate the stock damage wrought by the T-Mobile merger falling through. However in a Monday press call, Sprint CFO Tarek Robbiati said the carrier will leverage Altice's service footprint across 21 sates to deploy "thousands of small cells". Meanwhile, Sprint parent SoftBank issued a statement announcing plans to increase its stake in the US wireless carrier.

Altice USA has 4.9 million residential broadband and pay TV customers, having coalesced a year ago when Europe's Altice NV closed on its separate purchases of Cablevision and Suddenlink Communications.

This isn't Altice's first foray into wireless though, as it's a subsidiary of Altice NV, which has more than 26 million mobile customers in countries including France, Portugal, and the Dominican Republic.