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Telco M&A May Amazingly Continue After Leap Wireless, AT&T Deal

At this time 24 months ago, AT&T was lobbying with the Department of Justice to win approval of its proposed $39 billion merger with T-Mobile USA (TMUS). When that deal was blocked on antitrust grounds, it set off a rapid consolidation of the industry among second-tier players.

T-Mobile acquired MetroPCS in October while, most recently, the industry's third player Sprint (S) was taken over by Japanese telecom SoftBank of Japan. Sprint also recently acquired full control of Clearwire (CLWR).

Friday's merger signals AT&T, the nation's biggest telecom by revenue, believes the DoJ will allow it to be an aggressor in the wireless sector.

Consolidation among industry third and fourth players such as Sprint and T-Mobile may have altered market concentration figures and those surrounding all-important wireless spectrum. Leap Wireless is also a regional service provider, a contrast to T-Mobile, which is the industry's fourth-biggest national player.

The DoJ has expressed an interest in fostering at least three or four nationally competitive wireless providers, meaning Leap may mark the twilight for the telecom sector merger wave.

Sitting in the background of telecom industry consolidation are hedge fund titans who made savvy bets on a merger frenzy.

John Paulson of Paulson & Co. was chief among hedge funds in targeting potential wireless consolidators and has played a crucial role in the industry's realignment. The fund helped to advocate a lowered debt level in MetroPCS's takeover by T-Mobile, and it cast a crucial vote of support on SoftBank's bid for Sprint.

While Paulson may have made billions on stakes in Sprint and MetroPCS after buying both companies' shares when they were priced for failrue, he is also poised to see big profits from a deal for Leap Wireless at $15 a share.

Leap Wireless shares were trading significantly over AT&T's offer price in early Monday trading. Leap shares were rising over 113% to $17.00.

With Clearwire Sprint Moves Onto Final Act of Wireless Drama.

Glenview's Obamacare Bet Matches Paulson's Wireless Windfall.

-- Written by Antoine Gara in New York

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