Whether T-Mobile and Sprint can win back customers from Verizon and AT&T through discounted iPhones and cheaply priced smartphone data plans in the wake of consolidation is a far more interesting story.
Sprint, for instance, saw its quarterly losses narrow more than analyst forecasts in first quarter earnings because a greater-than-forecast number of subscribers left the telecom in favor of service offerings from competitors. T-Mobile also has seen relentless U.S. market share losses, in recent years.
Sprint's prospective recapitalization in a merger with SoftBank could help the company complete a multi-billion 4G network expansion that finally could encourage subscribers to leave AT&T or Verizon. Meanwhile, a $25.5 billion proposal put forward by Dish Network could give Sprint billions in wireless spectrum assets and an innovative bundled offering of wireless, broadband and TV offerings.
T-Mobile recently launched an "anti-carrier" strategy to offer iPhone wireless plans without contracts that may ultimately save consumers up to $1000 from the two-year plans offered by Verizon and AT&T. Its solid network will also benefit from MetroPCS's spectrum and customer base.There are also risks Verizon overpays for full control of Verizon Wireless, or that it will cut a deal just as wireless margins peak. Bottom Line: While Vodafone's Verizon Wireless stake may fetch a record price tag, hedge fund investors are playing smaller consolidation among the industry's struggling third and fourth leading wireless players. -- Written by Antoine Gara in New York. Follow @antoinegara