By Robbie Citrino for Kapitall.
Sprint (S), America’s third largest carrier, currently has a takeover agreement with T-Mobile (TMUS) that is up for review by the Justice department, the outcome of which could decide the fate of the two companies and the telecom industry as a whole.
Both Sprint and T-mobile are dwarfed by their rivals, making it hard for them to compete for spectrum and even turn a profit. However, the proposed plan would raise their subscriber base to a competative level and get them back in the telecom fight. In addition, it would provide better service for nearly a third of Americans while increasing competition among three of the country’s largest businesses.
Sadly, the government is unlikely to support it. Just like they did to AT&T (T) in 2011, the justice department may deny the proposal in order to prevent just three companies from running America’s wireless network. On the off chance the merger passes regulatory approval, however, the new company would put competative pressure on both AT&T and Verizon (VZ). Can that be bad for consumers?Do you think Sprint and T-Mobile will win their gambit to join the big players, or should prudent investors avoid these stocks? Use the links below to start your own research. Click on the interactive chart to view data over time. 1. Sprint Nextel Corp. ( S, Earnings, Analysts, Financials): Offers wireless and wireline communications products. Market cap at $33.13B, most recent closing price at $8.40. 2. AT&T, Inc. ( T, Earnings, Analysts, Financials): Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $171.02B, most recent closing price at $32.47.