Even before the merger talks focused the spotlight on T-Mobile US, however, it was already an attractive investment because of the recent turnaround that T-Mobile US has staged.
T-Mobile US shares are up $1.73, or 4.5%, at $40.06 Thursday morning, following The Wall Street Journal's report about the talks, which cited anonymous sources familiar with the discussions. Details on a purchase price and what mix of cash and stock would be involved remained unresolved, the report said.
Investors should note that Dish has embarked on merger talks with other wireless and satellite companies in recent years without reaching final deals, as the Journal pointed out.
Headquartered in Bellevue, Wash. T-Mobile US is the fourth largest provider of mobile communication services in the U.S., providing services under the T-Mobile and MetroPCS brands. As of the end of 2014, it provided service to more than 55 million customers.
Under the leadership of CEO John Legere since 2012, T-Mobile has successfully differentiated itself as the low-cost provider in the marketplace, with prepaid and low-cost, postpaid plans with no annual service contract.
It will even buy out your current carrier contract in order to win your business. T-Mobile has positioned itself as the "uncarrier."
T-Mobile's aggressive marketing tactics appear to be paying off. Branded postpaid net customer additions for 2015 are now expected to be in a range of 3 million to 3.5 million customers, which is an increase from previous guidance of 2.2 milion to 3.2 million.
In its latest quarterly report, on April 28, T-Mobile US beat Wall Street's estimates for revenue, although it did miss earnings per share estimates by 5 cents.
The company said it had 1.8 million total net adds, 1.1 million of which were branded postpaid net additions. It also reported its best ever postpaid churn, which was only 1.3%. Low churn means that customers are staying with the company and appear satisfied with the cost and service. T-Mobile is now dangerously close to passing Sprint (S) as the No. 3 wireless provider.
All these new adds will help T-Mobile US to fund more than $5 billion in spectrum growth over the next year with minimal market impact.
Deutsche Telekom (DTEGY) still owns 66% of T-Mobile and said at its recent shareholder meeting that it's still looking for a U.S. partner for T-Mobile. Last year, Deutsche Telekom tried to sell T-Mobile US to Sprint but ran into regulatory resistance.