Analyst: T-Mobile Should Explore Alliances with Amazon, Facebook, Google
NEW YORK - What's next for T-Mobile USA after its failed deal with AT&T?
The New York Times cited an analyst who argued that the company won't be able to court other telecom giants Verizon or Sprint as potential deal partners, because they use different technologies to service their cell phones.
Independent analyst Tero Kuittinen told the Times that T-Mobile must now explore more creative deal opportunities. He suggested that the company should, for example, explore partnerships with such online giants as Amazon.com, Facebook and Google.
T-Mobile’s spectrum, not its existing customer base, is its most valuable asset, he argued.
Bloomberg News reported on Tuesday that T-Mobile has some time to explore other potential deals thanks to a $3 billion break-up fee that AT&T must pay T-Mobile parent Deutsche Telekom due to the failed deal.
The report said that the firm has about a year before it needs to begin looking for a new partner amid rising costs for improving its network.
On Monday, AT&T had called off the proposed $39 billion deal amid regulatory opposition.
Wolfgang Specht, an analyst at WestLB, told Bloomberg that the $3 billion break-up fee will cover T-Mobile’s expenses for 12 to 24 months. If the company doesn’t find a new partner then, it risks failing to generate enough operating cash flow to cover its capital spending needs, he argued.